The first requirement is a webcam. Today many laptops have integrated webcams located at the top of the screen. If you don't have one of these, webcams are available widely on the high street or from online retailers and cost from around £25.00 in the UK, 36 Euros in Europe or $44 in the US. Most have headphones/speakers so you can talk as well as view the other person. After linking the webcam to your PC and installing the webcam software you then need some webcam chat software.
Chat software is available for free - MSN and Yahoo for example both have programs that allow you to chat using your webcam with audio and images.
A better option is to join one of the webcam chat networks. This means you join a community of registered users and have a large number of new people to chat to throughout the world. The free software provided by this network integrates with MSN Yahoo ICQ and AOL messaging systems so that you can add your own personal contacts.
A small yearly subscription charge usually applies to chat networks but after that there is normally no cost involved (apart from your internet service provider subscription) and you can chat whenever you wish with no time constraints. Certainly much cheaper than an international telephone call.
Beware of free webcam chat networks, they provide no security for members, are usually crammed with distracting adverts and the video and audio quality is generally poor and unreliable