Be happy, because video calls are now legally available on the iPhone. Be sad, because it's one way only, so you won't be able to flash your naughty bits.
Fring—a free chat client for the iPhone that supports most standards—has been updated to support video conferencing on the iPhone, using Wi-Fi. 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, even if you have the 3G videoconferencing kit. The reason is a physical one, according to the developer: The iPhone doesn't have a front camera, so you can't do face to face.