Internet telephony service Skype has released its Skype 2.0 beta software upgrade which allows users to make video calls over the Skype Network.

Skype Video is compatible with almost any webcam and allows users to make free video calls to other Skype 2 software users.

Skype has also announced that it will partner with Creative on a Creative WebCam Instant Skype Edition, which will include a personal headset with microphone, software, and a standalone microphone for use when several people wish to talk. Some of Creative's webcams also provide video special effects such as avatars via software called Advance Video FX.

Skype 2 also offers call management tools, including one-click access to key features and options; the ability to let your contacts see your mood, via emoticons; and the ability to see what time it is where your contact is.

It also includes contact organisation - the ability to group your contacts. This feature also allows you to start conference calls, chats, or file sharing with the whole group with one click. Skype 2.0 also adds the ability to look up contacts in real-time by typing a name into the dialling field, and a Skype toolbar for Microsoft Outlook.

Skype, recently acquired by eBay, has 66 million users worldwide.