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Facetime on the iPad 2 has worked great for me so far.

Where it shines is when you have multiple people in the chat. The big screen makes it easy for everyone to see and participate. Much more difficult to do that on an iPhone/iPod touch.

The iPhone is easier when you want to use the rear camera to show something to the folk(s) you're chatting with. Aiming and moving around the larger iPad feels awkward.
 
FaceTime seems to work flawlessly for me. Use it on the phone and iPad. Only glith ive seen is FaceTime doesnt like to connect to another FaceTime user on the same wifi.

It definitely makes the world smaller.
 
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