sorry for the pubescent exclamatory acronym but I can hardly contain my amazement.

I could not initiate a video chat, only voice, but could activate video once my interlocutor started the video call. He used the service from inside gmail.

Amazing.

Are you doing the same as here?:

http://talk.maemo.org/showthread.php?t=40772

I didn't do anything special:
1. I added a Gtalk account under Voip and IM Accounts in Settings. Entered credentials and Saved.
2. Edited my buddy's contact entry in Contacts. Added a field and selected Gtalk and entered his Gmail address.
3. Clicked the Status area, connected to my wifi, and changed my Availability.
4. My buddy signed into chat on his PC. He instantly appeared Available in my list - green dot beside his name

What we tried:
1. I called him using Gtalk from his entry in my Contacts. Voice only. I could not initiate a Video call. Worked great but it sounded a little worse than Sjype.
2. He called me - Voice chat. As before. Good.
3. He called me - Video Chat. I picked up and shortly saw him. I clicked the Speaker button and activated the Speaker Phone so I can look at the screen. Then I clicked the camera button and then we were both displayed on my screen. At that point he also started seeing me. It was possible to view me full screen but the quality was not great. Still, pretty amazing.

IM also worked very well. Nicely threaded and fast.

I tried it too. It is quite cool :-D

Its working! thanks!

Yep, confirm too it works. Thanks for the tip.

Confirmed works, tough not working for n900 --> n900.

Seems to work relatively well.

Only issue I've had was the image the phone was receiving from my laptop's webcam would become a little pixelated after a few seconds, and it would stay as such no matter how much I moved.

This was both on 3.5 and WiFi.

so we can have 3g video calling and skype video calling too then?

zomg yay! thats the first time i've used my front facing camera! very very cool! and the best thing about it is that it didnt require any sort of hacking or anything! its just a built in feature of the phone! i <3 my n900!