Fring has added video calling support to the iPhone and iPod touch via Skype. This is a huge step further. iPhone became a videophone!

It works on Fring to Fring, and Skype to Fring. Unfortunately, it's not bi-directional. You would be able to see whoever is calling you from a desktop, but you won't be able to transmit your image. The reason is because the iPhone doesn't have a front camera, so you can't do face to face. The application will support two-way video calling if the iPhone and iPod touch gain front-facing cameras in the future. The company already supports two-way video calling on several Nokia phones with such cameras.

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A promotional video highlighting the new video functionality has also been released:

Fring is available for free from the App Store (link ^[3]).