Skype has, at last, come to the iPhone. Everyone’s favorite VoIP application is Wi-Fi-only — of course — but what is there works great. The best news, though, is for iPod Touch owners. Because Skype is Wi-Fi-only, if you have a 2G Touch and headphones with a microphone, you get the same functionality as the iPhone.

Let me make that clearer. This official, Apple-sanctioned application turns an iPod into a telephone. And it’s free. I took it for a very quick spin to see how it worked.

Skype is a very solid and polished application for a first release — it’s good to see that some developers resisted the urge to release crap in the App Store's first week. After installing the 2.7MB app, you enter your username and password. You then see your contacts list. You can either see all contacts and narrow them down by typing into the search field, or opt to see only online contacts. It looks just as you would expect:

Touch a contact and you get the usual Skype choices: call or chat. Chatting works just like IM, with you and your chat partner’s pictures showing up next to speech bubbles containing the text. Neat and easy. You can also switch between chats and the app keeps your old chats so you can pick up where you left off.

But you really want to know about the phone part, right? In short, it works fine. Or, more accurately, it works as well as Skype on the desktop which means mixed quality and reliability. That’s a network issue, though — Skype for iPhone as software is probably even better than the desktop version.

I hooked up my Apple-made iPod headphones with remote and microphone. A test call to the Lady (after I woke her up) worked fine: Although the sound was very low on my end, she could hear me very clearly. There is, of course, no video. Here are a couple of shots:

As you can see, all the usual phone features are there, arranged in a very iPhone-like way. If you have a Skype account which includes Skype Out or you have a Skype number, you can use those to make and receive calls from regular phones. Dial just as you would with an iPhone:

The address book icon at the bottom calls up the standard iPhone/iPod Touch address book and will paste in numbers therefrom. I couldn't try this part as I no longer use Skype Out since my parents entered the 21st century and came off dialup.

The conclusion? If you are a Skype user, you should have this application. It's free, it is easy to use and just works. Being limited to Wi-Fi means it won't change the face of telephony – yet. But for Skype the move to mobile devices is an inevitable step, and when the iPhone OS 3.0 surfaces, we should get call and chat notifications showing on the home screen and maybe even a plugin mic for the iPod Touch, making it a proper VoIP handset.

Product page [iTunes]