We use Skype for instant messaging, cheap voice calls including very reasonable rates for international calls, and video conferencing. I've long been a fan of face-to-face communication as I think you lose something from email-only interactions. And while phone calls are a step up from text-only media such as email and IM, there's no replacement for the visual cues and context that video can provide. In-person meetings are better still, but the logistics and costs of meeting frequently in the same physical location can be prohibitive for geographically-distributed teams.
In the past, I've used Tandberg video units, which are easy to use, relatively simple to set up and function very well, but their cost is extremely high — list price almost USD 3k for the least expensive unit! With Skype and a good camera like the Microsoft LifeCam HD Cinema (about $50 with noise-cancelling microphone and true 720p HD quality), you can have a great video-conferencing setup for 5% of the cost of the cheapest Tandberg.