Ever since the iPhone was introduced back in 2007, users have dreamed of the day they could do video conferencing with it.  While a camera on the face had seemed one of the major stumbling blocks, it wasn’t exactly a deal breaker to the whole concept.  Well, now we’re getting the camera we had all been hoping for, but the feature isn’t quite as mobile as we had hoped.

facetimeThe new FaceTime feature of the iPhone 4 will take advantage of both the back camera and the new face camera to allow you to video conference with any other iPhone 4 owner out there.  Luckily there is no extra setup required to get the feature working, once your iPhone 4 is active, FaceTime is active.

All you need to do to use it is find someone in your contacts and you’ll touch the FaceTime button to begin a video call with that person.  If you are already on the call and decide you would like to switch to a video chat, all you will need to do is tap the button and the call will seamlessly switch over to a video chat.  The system works in both landscape or portrait so you may orientate your phone any way that you would like.

If you aren’t interested in showing yourself, but instead would like to show what you’re seeing — say a birthday party, school play or so on — you can switch to the back camera and then use the screen as a viewfinder.

Now for the two bad pieces of news.  The first up isn’t horrible, but the video calls only work between iPhone 4 handsets, so no calls to your friends with an iPhone 3GS.  The biggest issue is that for right now it will only work over Wi-Fi, which makes us kinda wonder about the whole switching from a normal call to a video call deal.  Will it disconnect the cellular connection?

Wi-Fi isn’t exactly a deal breaker, it is just unfortunate, albeit not really surprising, caveat to the deal.  Apple CEO Steve Jobs said that Apple would be talking with its cellular partners, but with the new bandwidth limitations that AT&T is imposing on customers singing up from today forward, video calling could be a total nightmare to your budget.

Even with the drawbacks it is still a welcomed addition to the iPhone, and one that has been needed for some time.

What say you?  Are you excited for video conferencing on the iPhone?  how do you feel about the limitations?