Requirements:

• Skype for Windows Version 2.0.0.43 or Skype for Mac 2.0.0.6 or Skype for Linux 2.0.0.13 and above for both skype video caller and receiver
• a successfully installed camera connected to you computer before starting Skype
• you do not need to have a camera on both computers. Video calling works one-way as well

Although the video feature of Skype is rather straight-forward here are some how-to-instructions:

The following screenshots were taken using version 3.6 of Skype for Windows. Scroll down for more screenshots of other versions.
A quick guide for video on Skype for Mac can be found here.



To access the options enter the Tools-menu and select Options




In the options dialog select Video from the categories on the left hand side.
Check [v] Enable Skype Video and select your camera from the dropdown at the top.
You should see a preview of your webcam on the right hand side.
Double-click on the preview to switch to fullscreen and adjust your camera lens (if available and if your camera does not have auto-focus) to get a sharp picture for the current distance.
Use the Webcam settings to access the webcam's own settings page.
Close the Skype video options afterwards.




Start a call with one of your contacts who is Skype-video-enabled as well.
If you haven't activated [v] Start my video automatically in the video options (see Step 2 "Video Options") you need to hit the Start My Video below of the avatar/other party's video.
Wait some seconds for your camera's transmission to start. You should now see your own video as a small picture in the lower right corner of the call tab.




To change the video layout use the buttons which appear when hovering over the video window.
Double-click inside the video window to switch between fullscreen and back




When in "video in window"-mode you can resize the window by dragging the border. This applies to the calltab-layout with the video in the main Skype window as well.
If you resize the window your own picture-in-picture will resize accordingly.

Instructions and screenshot for the 3.2-3.5 versions of Skype for Windows:



To access the options enter the Tools-menu and select Options




In the options dialog select Video from the categories on the left hand side.
Check [v] Enable Skype Video and select your camera from the dropdown at the top.
Hit the Test Webcam button afterwards.




Adjust your camera lens (if available) to get a sharp picture for the current distance.
Use the Webcam settings to access the webcam's own settings page. Hit close afterwards.




Start a call with one of your contacts who is Skype-video-enabled as well.
If you haven't activated [v] Start my video automatically in the video options (see Step 2 "Video Options") you need to hit the Start My Video below of the avatar/other party's video.
Wait a seconds for your camera's transmission to start. You should now see your own video as a small picture-in-picture (PIP).




To change the video layout use the buttons which appear when hovering over the video window.
Use double-click to switch between fullscreen and back




When in "video in window"-mode you can resize the window by dragging the border. This applies to the calltab-layout with the video in the main Skype window as well.

Instructions and screenshot for the 2.xx versions of Skype:



To access the options enter the Tools-menu and select Options




In the options dialog select Video from the categories on the left hand side.
Check [v] Enable Skype Video and select your camera from the dropdown at the top.
Hit the Test Webcam button afterwards.




Adjust your camera lens (if available) to get a sharp picture for the current distance.
Use the Webcam settings to access the webcam's own settings page. Hit close afterwards.




Start a call with one of your contacts who is Skype-video-enabled as well.
If you haven't activated [v] Start my video automatically in the video options (see Step 2 "Video Options") you need to hit the Start My Video below of the avatar/other party's video.
Wait a seconds for your camera's transmission to start. You should now see your own video as a small picture-in-picture (PIP).




To change the video layout use the buttons which appear when hovering over the video window.
Use double-click to switch between fullscreen and back




When in "video in window"-mode you can resize the window by dragging the border. This applies to the calltab-layout with the video in the main Skype window as well.

Test your video using videoecho123

The third party company Tapur offers a video test that is to be used like Skype's echo123 "Call Testing Service":

videoecho123 is automatic video test service for Skype.
Have you heard about echo123 ?
It's Skype sound test service. videoecho123 is the video version of echo123.
You can test your Skype video function on your own.

It works like the echo123 service:

1. Call skype:videoecho123
2. First you listen to the audio message explaining the service
3. first beep
4. record your video
5. second beep
6. THEN video playback starts

Its still in Alpha test but it is a good first test. More info at www.tapur.com/en/

Note:
This service is not affiliated with Skype and is managed by external company tapur.com.