I had same problem: they saw and heat me but I couldn't see them (i heard them ok).
I solved this problem many times (either pc or mac, wind xp, winf 7 etc) with turning off antivirus software (in my case avg free) and firewall on both devices/computers. Hope it helps someone.
Just this week my skype video (which was working fine - I have a built-in webcam) failed and now I can see them but no one can see me...my webcam works (tested online) but Skype detects no webcam....HELP!!!!!!!
And download an older version of Skype to use it properly until they fix this issue.