The good news: video calls work over both 3G and Wi-Fi. The crap: Support is limited to the following Android 2.3 phones: Nexus S, Desire S, and the Xperia neo Xperia pro. Update: Now hacked for some other devices, too! (Thanks Sam!)
Apparently support for more handsets is coming soon.
On its blog, Skype goes onto to explain that the new version also includes a “complete redesign of the Skype for Android user interface.”
There's a new main menu on the Skype app for Android where you can navigate easily through your contacts, access your Skype profile to change personal details, use the dial pad to make calls, see the balance of your Skype Credit and, of course, make video calls.