Video Conferencing
From Payne.org Wiki
My current favorite desktop video conferencing system is Skype, which added video support in the 2.0 release (late 2005).
I've set it up on two systems, and it was literally plug-and-play in both cases. With the exception of some beta version quirks and frame rate problems over slow links, it has worked flawlessly.
A good hardware choice is the Logitech QuickCam Orbit. It's a bit pricey, at around $100, but it has great picture quality and a built in mic. Also, you can set the camera to follow your face as you talk. We find it's ideal for Grandparent / Grandchild communication.