Skype is now available for your Android phones running OS 2.1 or later and can be downloaded through the Android Marketplace.
The new Skype app lets you make free voice calls (there is no video option) to other Skype users, as well as send free instant messages. You can also use it to make calls to landline or cell phone numbers using purchased Skype credits. For international calls, the Skype rates are often lower than what you would pay through your cell phone carrier.
If you already have a Skype account, set up is easy. Just download the app and click the box to import your existing Skype contact list. Otherwise, there are a couple quick steps to setting up a new account.
What's unfortunate with this release are the limitations put on the application by the carriers and by Skype itself.
In the U.S., you can only make Skype calls over Wi-Fi. Since this is only a U.S. restriction, it is clearly due to carrier push-back, not technical limitations. Great if you have access to a Wi-Fi connection, useless if you don't.
According to Skype, the current version has only been tested with HTC and Motorola devices. When I tried to install it on my Samsung Vibrant (Galaxy S), Skype refused to log me in. Others have also reported Galaxy S incompatibility, which includes the Sprint Epic 4G, the AT&T Captivate and Verizon Fascinate.
In my testing on the T-Mobile's HTC MyTouch 3G Slide, call quality was acceptable, but not great. I also was unable to make calls to a landline number even though I have Skype credits available. Repeated attempts simply resulted in repeated failures.
Hopefully, Skype will fix these issues soon.