I found that video does not work in my Skype (Beta) 220.127.116.11 under Fedora 12.
$ sudo dmesg | grep skype
process `skype' is using obsolete setsockopt SO_BSDCOMPAT
$ sudo cat /var/log/messages | grep skype
Jan 31 23:15:01 localhost kernel: process `skype' is using obsolete setsockopt SO_BSDCOMPAT
After a quick online research I found that you can link Skype with /usr/lib/libv4l/v4l1compat.so to get the video work for you.
Make sure you have libv4l (a collection of video4linux support libraries) installed:
$ sudo yum install libv4l
Then you can write a script with the following content:
Let's call it skype-video.sh and make it executable:
$ cd ~/.Skype
$ vi skype-video.sh
Now add the content provided above, save the file and exit (:wq).
Make the file executable:
$ chmod 755 skype-video.sh
Now you can lunch your "new" Skype and the video should work. It works for me.
$ ~/.Skype/skype-video.sh &
Important: Make sure that there is no another Skype instance running at the same time.
Skype for Linux
Fedora Project - Features/Better Webcam Support