This is an important development for the service -- and one that is long long overdue.
You see, other services -- such as my former company, SightSpeed (the video chat leader that was acquired by Logitech in November 2008) -- have offered multi-party video chat for years. In fact, SightSpeed launched up to 4-way video chat at least 5 years ago and introduced up to 9-way video chat in the first half of 2008. With Skype up to now, the inability to video chat with more than one other person has been a gaping hole in the service's feature set. Yet, still 36% of all Skype-to-Skype calls apparently utilize video chat as-is.
Those numbers -- if accurate -- should dramatically increase with introduction of multi-party video chat. Remember, Skype is heavily used by businesses worldwide in addition to consumers. And, inexpensive 5-way videoconferencing -- which initially will be offered for free to beta users (but ultimately is likely to be a paid upgrade feature) -- will be a big plus for the business user.