I had the same problem when I first installed it. You need to go into the preferences and set it up so that video is available, for some reason that isn't a default. Then your iSight camera (which is the name of it, not facetime) will kick in.
You r using an older Apple product. With a very new (1 week old) Imac, the ONLY video choice is Facetime camera. There is no Isight camera (which does apparently work). The Facetime camera does not appear to work with Skype. Facetime works well (with the webcam) on my system. Am i one of few Skype users who have this problem?
My iMac 27" LION 10.7.1, skype Version 126.96.36.1993 and Version 5.4 Beta, don't regonize the iSight camera ,
but Skype version 188.8.131.5280 it works(ok) like charm.
I have the same problem..did anyone find a solution? I read some threads about iChat camera intefering with skype camera, but I already deleted iChat and still have the same problem. Thanks for your help!
To all commenting that the FaceTime camera doesn't work, the failure to activate the camera is invariably down to finger trouble.
The installation here is a 2011 Quad Core iMac running Lion and with Skype 184.108.40.2063.
I use two cameras.
The built in Facetime camera is used for for general video conferencing whilst a high end Sony DV camera connected via the Firewire port is used for live television broadcasting.
Both appear in and are easily selectable from Skype - Preferences - Audio/Video.
It's advisable to check that the video source isn't pointing to somewhere else, such as a video capture card or any one of the video effect type plugins available online.
Some of these software plugins can hog the video input to Skype.
If you have any of these plugins installed, my recommendation would be to remove them, since they're not particular useful and many cause lip sync issues amongst other things.