The latest update to Skype's Android application has just been rolled out and a big part of its goodie delivery is two-way video calling. Only a quartet of phones are supported right now: Google's own Nexus S, HTC's Desire S, and the Xperia Neo and Pro from Sony Ericsson, all handsets that shipped with Android 2.3 installed. We suspect the rest of the Android world won't be far behind -- Thunderbolt users will surely be wondering why they're not included in this first batch -- but for now it's just that fearsome foursome. Also included in Skype v2.0.0.45 is a UI overhaul and support for SMS messaging, neither of which suffers from any handset restrictions. Hit up the Android Market on your phone (the web Market still lists version 1) to get at the latest software.

[Thanks to everyone who sent this in]

Update: We've just spent a little quality time with Skype 2.0 and its newfangled video calling. Notably, we couldn't get a video call to work between the Xperia Neo and a desktop version of Skype (update: video chat between the Skype Android app and the desktop client has since been confirmed to work; thanks, David!) -- it was only possible to get video when calling between the Neo and the similarly compatible HTC Desire S. Once we did establish a connection, though, frame rates were smooth and buttery and the UI is simple and unintrusive yet offers quite a few functions. You can mute the call, choose between the front- or rear-facing camera, reposition the small window that shows your video feed anywhere on the screen, or -- with a double tap upon that window -- switch focus so that your own video output dominates the screen and your buddy's feed is relocated to the smaller preview. It's a great looking implementation of video calling, though we did only test it over WiFi, 3G performance may be materially worse.

Update 2: Skype's press release and demo video can now be found after the break.

Update 3: Though you might suspect otherwise given the Nexus S' inclusion, Skype has now confirmed that the Nexus S 4G isn't supported just yet -- it will apparently be brought into the fold with the next release.
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Skype brings Video Calling to Android Phones

LUXEMBOURG--(BUSINESS WIRE)--Skype today announced an updated version of its Skype for Android app – Skype for Android 2.0, bringing Skype Video Calling to the currently fastest growing mobile OS1.

"We are committed to bring Skype Video Calling to as many platforms as possible and are delighted to deliver on this with our new updated Skype for Android app"

With the new version, users will be able to make and receive free2 1-to-1 video calls over Skype between their Android phone and other Skype contacts on the iPhone, Mac, Windows PCs and even TVs3. Skype for Android with video works over Wi-Fi or 3G data connections and can be downloaded for free from the Android Market or Skype.com/m using any phone browser.

"We are committed to bring Skype Video Calling to as many platforms as possible and are delighted to deliver on this with our new updated Skype for Android app," said Neil Stevens, Skype's vice president and general manager for product and marketing. "With approximately 30 million concurrent users logging into Skype at any given time4 and making up to half a million simultaneous video calls5, Skype for Android with video makes it even easier for users to share moments with their contacts wherever they are."

In addition to video calls, users can also make calls to landlines and mobiles around the world, as well as send SMS's to friends and family anywhere in the world at great Skype rates. All this comes with a complete redesign of the Skype for Android user interface. There's a new main menu on the Skype app for Android where users can navigate easily through their contacts, access their Skype profile to change personal details or see the balance of their Skype Credit. Finally a new mood message box at the top of the Skype app menu makes it easier than ever for users to share how they are feeling, what they've seen, or what they're up to.

For this first phase of launch, handsets that support video calling include the HTC Desire S, Sony Ericsson Xperia neo, Sony Ericsson Xperia pro and the Google Nexus S.

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Skype 2.0 brings two-way video calling to Nexus S, Desire S, Xperia Neo and Xperia Pro