I think facetime is absolute crap, i dont think it can compete with skype, at least until they make a windows client (and maybe a linux one which propably wont happen).
Facetime rocks.
I use it way more than iChat or Skype.
The only thing is - you have to get the other person on an iPhone.
I run a business with people all over the world, and we have been using Facetime almost daily - better than a phone call and great for "eye contact" presence that really helps communication, and also great for "show and tell" issues where you can flip to the front camera and point out where a problem is on a thing.
This is why I am so stoked about iPad 2 - I really want facetime on a bigger screen. Going to give one to my mom - she can use it like a picture frame and then all the grandkids can Facetime in from all over the place. It's so easy even an 80 year old can do it. My 80 year old mom took to it instantly on the iTouch, so iPad 2 upgrade for her is going to be awesome!
As for Skype - I often have trouble getting other people to use it properly. Sad but true. Same for everything else - even iChat has problems - You gotta realize that most people are not as smart as you and I - they are not computer geeks - so Facetime is great just for the fact that it works guaranteed with no issues. (except you have to be on a wifi network).