One of the reasons I brought my Samsung Galaxy S was because it has a front facing camera.
However I have found since buying it:
So what can I actually do with my front facing camera or did I just waste my money?
The built-in Camera app on the Galaxy S can use the front facing camera. It's called "Self Shot Mode" and I've used it on mine once or twice, easiest way to grab a quick picture of you and a friend when there's no one else around to take the shot.
Open the camera app, press the square symbol at the top-left (the mode button), press Self-Shot, smile at the funny person on the screen!
Update November 2010: As an update, the official Samsung Froyo release has changed the way this works, there is a new icon in the top-left of the camera screen, that looks like a camera with rotating arrows around it, pressing this button swaps between the front and rear cameras. Picture of the new button to swap between cameras
See this table for a list of which Galaxy S models have the front facing camera (and other differences between the models in the range).
Well, at least I've been using the front facing camera for video phone calls. Seems to work well enough between Samsung Galaxy S phones, haven't tested with other phones yet.
I wrote an app that uses the front facing camera of the EVO and Epic. It is silly, but it's free. :-) Check out "RealMirror".
qik and fring both support video chat using that camera, but only to other cell phone users using qik or fring respectively. fring launched with skype support, but that was quickly disabled after a spat between the two companies.
At the moment (October 2010), there doesn't seem to be any way to video chat from android to a PC. :(
Update: There is a leaked version of Yahoo IM that includes video chat: http://phandroid.com/2010/10/19/yahoo-video-chat-app-leaked-thanks-to-mytouch-4ghd-rom/
Update (12/17/2010): http://www.oovoo.com/ now has a client in beta that will allow PC <-> android video chat. Currently the Epic is supported, but they say it's "coming soon" for other Galaxy S phones.
According to their spec THIS is how a developer would take advantage of the camera. I'd be really surprised if the pre-installed camera application didn't do this, but the point is that it's definitely accessible to the outside world for taking advantage of, so it's just a matter of time before someone does (if no one yet has).
If you have more money you'd like to spend, and can't wait to use it, I can write you an app that takes pictures with that camera for about $500. :)