Just like video killed the radio star, if Skype has its way, it will kill conventional Internet phone calling.

The proliferation of cameras being built into computers and standalone devices has Skype betting that people will want to communicate via video instead of simply through voice over the Internet. The unit of eBay (EBAY) recently unveiled new Skype software: Skype 4.0 Beta for Windows that is focused on making it easy for consumers to make video calls. The software comes with a bigger screen size, a single click on the video call button and the ability to have instant messaging chats while on a video call.

“We think the conventional VOIP [voice over Internet protocol) is dead,” said Scott Durchslag, chief operating officer at Skype. “The real future of communications is video.”

While people are use to communicating through voice, the popularity of Internet video services like YouTube and the ability to make video calls for free is prompting different generations to embrace video calling. The growing use, coupled with the prevalence of cheap video cameras, has prompted Skype to go after the video market in a more focused manner.

“Once you get video as the basis of your communications, everything seems like one dimensional in comparison,” said Durchslag. “The new 4.0 release [of Skype] puts video front and center.”

Durchslag noted the experience is much less sensitive to bandwidth fluctuations off a WiFi network, resulting in a better quality. Skype has offered video calling for a couple of years now but in the past, the video was often times grainy. New technology enables the image to improve as the strength of the bandwidth gets better.

Skype isn’t the only technology company that sees the value in video communications. The New York Times reported earlier this week that Cisco Systems (CSCO) is working on technology that will let consumers use its corporate videoconferencing system to communicate over high definition televisions. Computer makers like Apple (AAPL) have been building video cameras into their notebook and desktop computers and ASUS launched a Skype certified videophone for Internet calling in November. The phone, the AiGuru SV1 has a 7 inch display, built in Webcam, speaker and microphone and sells for $299.95. With the videophone, Skype customers can call other Skype customers without a computer.  Durchslag said more standalone devices will be unveiled in a wide range in prices. Google (GOOG), Microsoft (MSFT) and AOL all offer video chat through their instant messaging as well.

According to Skype more than 25% of its Skype-to-Skype calls include video. This year more than 1 billion copies of Skype were downloaded.

“We are seeing video becoming ubiquitous in different segments,” said Durchslag. “Everybody is building cameras into their PCs and folks that aren’t comfortable with a PC have simple dedicated appliances.” Durchslag noted that making it simple to make video calls is paramount for the market to take off. “One click and you’re viewing the person at the other end. They can let it run all day and it’s not costing them anything.”

Although the ability to make video calls on your computer or videoconferencing device is convenient the Holy Grail for Skype and other technology companies is being able to make video calls on a cell phone. Unfortunately the carriers in the U.S. aren’t too keen to offer a free service like Skype, which could eat away at their revenue.

Durchslag said it will take time for Skype users to make video calls although it’s heading in that direction. “We’re starting with being able to bring the voice experience with you,” he said.