Summarize the following:
Check to make sure your camera is working properly.  On a PC, from the Tools menu, select "Options," and then under General, choose "Video Settings." On a Mac, from the Skype menu, select "Preferences", then click on the Audio/Video tab. Turn on your webcam or connected video camera. You should see your webcam output in the window. If you have multiple cameras hooked up, select the desired one from the Camera menu. When you've made your connection and verified it's working properly, close the Preferences window. Then, click on "Online" to show only your Skype contacts that are available for a call. If you have many contacts online, you can quickly find the person you're looking for by entering their name into the search field at the top right of the screen. Position your cursor over the person you wish to call. A green button will appear over their picture that says "Video Call," with a small camera icon to the left. You'll hear a ringing tone until the other person answers, or the call times out. Note: if the button only says "Call," check to make sure your camera is hooked up and functioning properly. Once the call is connected, you'll see your friend's picture in the window. When you're finished chatting, click the red phone icon at the bottom of the window to end your call.
Sign into Skype. Select your camera. Click Contacts. Initiate the call. Talk with your friend.