I have been a user of Skype for around one year. I got into it because of relatives overseas. My partner also travelled to Europe for 5 weeks last September, so we did most of our communicating via Skype for free. I love the video chat, it is so much nicer to see the person you are talking to. Of course all this depends on your broadband plan. I have found that it can chew through the download allocation (but I do love a long chat). I have had no problems with connections using cable broadband and video chat. If you know someone without a camera connected to their computer you can just talk away without the video. Skype's big restriction is the computer you need to use it. I know that you can buy Skype phones (I've seen them at the Optus shop) but they don't seem to be terribly popular.
And like most other forms of internet based communication, you leave yourself open for some unwanted attention. I have had a number of random people (mostly from Asian locations) try to make contact with me on Skype. I can only assume their motivations are not great so I just block them from the outset. It's easy to do, and not a real problem.
Skype is a must if you make overseas calls to people with a broadband connection.
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