You can learn more about it here.
http://www.skype.com/.../support/user-guides/
For a basic video call there is no cost involved.
We used to talk to our daughter on a video call when she was in Australia last year, from our PC to her laptop, sometimes for more than an hour.
Main requirment is a decent broadband connection. If it is slow you may have problems (picture cutting out etc), or it may just revert to sound if it cant transmit the picture.