I don't get it - aren't there a ton of video chat apps? Not only the big ones (google, skype), but lots of startups as well - oovoo, etc?
If software identified the user's face in live video and transmitted just that at high resolution, discarding or compressing the rest, how much efficiency could be gained?
Separately - as data gets cheaper and video chat is further optimized, video chat over 3G/4G becomes more feasible. Probably our answer to this is in the countries that have abundant bandwidth? What do high schoolers in Korea/Scandinavia use for video chat?
Edit: I mean to suggest that photos might be the optimization.