One of the most effective video conference solutions I have seen was with a large UK finance institution.

For their monthly senior management conferences they had two video conference centres with each location set-up identically. Each room had a long conference table with the screen and camera set-up at the end of the table. Conference members then sat around the other three sides of the table looking towards the large screen. In operation, the real table and the virtual table on the screen seemed to blend into one creating a link between the two locations.

People could point, gesture and be seen looking at other members of the conference while talking, creating a sensation that all were present at one location. This worked very effectively and the participants were able to push the technology into the back of their minds and concentrate on the meeting content. However, it must be considered that this was implemented with a large budget normally associated with financial institutions.

This approach is obviously not appropriate for the more individual (and budget) aspects of a Skype video conference. It does however demonstrate that if one can introduce the feeling of being in a common location and more importantly achieve a method of creating a physical relationship between each attendee the mind is more ready to concentrate on the individuals and not the distractions.

Creating a common background filter as suggested by Martin may not be a bad first step.

Regards
Graeme

I had to set something similar up for a telco about 6 years ago. We also did the millenium office Christmas party across 4 sites simultaneously, though it got pretty much like the Eurovision as we had to transfer 'control' manually and there was a lot of 'Madrid, can you hear us?'
Actually, Skype can do this setup pretty well, and I don't agree with Graeme that it is not applicable to the individual video call. Lots of people have projectors now and new webcams such as the one Bill was talking about in a later post would be up to the job.
As for Martin's suggestion of Superman-style blue background, it's already been done, and it is indeed 'pretty clever'.