The program on the iPhone called FaceTime is what powers video chats between iPhone users. The iPhone is fitted with two cameras, one on the face of the phone and one on the reverse side. During a video chat or even a recording of a movie you can switch angles and look the opposite direction. This can come in handy when it comes to attempting to speak into the microphone while maintaining visuals. Additionally when you are taking photographs you can take one while looking at your reflection.
The iPhones video chat mode has amazing advantages for a number of reasons. Abstractly it is a good investment for the hard of hearing (I know a cell phone for a deaf man seems a little odd). Think about the way that deaf people communicate, with a phone that video chats deaf people could talk without talking and still be understood. For others it offers a benefit to those who want to check in on someone. Mom and Dad can see where their kids really are or you could catch your lover in the wrong place at the wrong time.
For whatever your reasons are, video chats are a great new development in the electronic age. The iPhone is the first to really revolutionize into the video chat market in a way that allows you to converse using real time video. Previously people would have to record the video message and send it and wait for a response, often time experiencing a wide delay on information. Now with the iPhone 4 and soon to be iPhone 5 along with pending HTC phones the process of video chatting is coming into popularity.