When you place a call to another party that has the iPhone4 (and iPhone4 Only) it will connect your voice call as normal... you will then press the facetime button and that send a request to your party on the other end that you are requesting a facetime video conversation. They will then accept the invitation and you will be connected.
You face and what the other party see will be in the small box that can be moved to any corner of the screen and the main entire screen will be the person you are talking to as long as they are facing there front camera at themselves.
It only works on WiFi so of course uses no 3g data at all and is charged to you just as it normally does taking away from your anytime minutes. The actual video conference itself is done through your wifi connection entirely and no data for facetime is transmitted through your wireless service.
Soo all in all your video portion is done through wifi and the voice is done through your 3g phone service as normal.