Video calling is in full effect on iPod touch. Now your friends can see what you’re up to, when you’re up to it. With the tap of a button, you can wave "hi" while standing in a foreign country, get a second opinion on a pair of boots, or have your friends bear witness to the everyday pranks, bets, and dares they otherwise might have missed — new iPod touch to new iPod touch or iPhone 4 over Wi-Fi using FaceTime application . And come face to face with even more fun.

Source: http://www.apple.com/ipodtouch/features/facetime.html