I've been doing a lot of Skype gaming lately - which is to say, I've been running an RPG campaign via the free online conference call features of Skype.
What I really like about it is that it's allowing me to game with friends in other cities and states. Given how bad I am at keeping up with normal phone calls, email, and letters, Skype is a godsend.
Originally, there were 5 players, plus GM, and due to social implosions, it has consistently been down to 2 PCs + GM. Prior to this campaign, I'd played in a few other Skype sessions, running up to about 8 players. Having tried several permutation, I can now clearly say that the ideal number of players for a skype game is 3. The further you push above that, the more the dynamic breaks down. "At an exponential rate" is probably accurate. Gaming with a large group always takes a bit of patience, as you don't get as much spotlight time as you might like -- but on Skype, this is seriously magnified.
The reason that Skype doesn't work well with larger groups, is that when one person is talking, there's no good way to butt in. If you interrupt them, neither of you can be heard or understood - it's one big audial mess. More often than not, they won't even hear you, and will keep on rambling. Since you can't see them, there's no subtle visual clues to let them know you want to butt in. This then drives people to use Skype's instant chat functions. The instant messaging seems simple and helpful at first, but quickly gets out of hand. Especially with a large group, which is almost guaranteed to end up with at least 3 or 4 chats happening simultaneously as people try "secretly" messaging one-another. Your attention gets divided, and sub-divided, and then sub-divided again. Everybody starts missing things, and it's impossible to get a good interactive scene of actual role-playing going.
A very frustrating experience, and at first I thought the only way around it was for the GM to micro-manage and be draconian. It was almost enough to make me quit Skype gaming, but luckily one of my players discovered something that would fix it.
For one-on-one calls, Skype has video, but the conference call function is audio-only. We quickly learned that you need video. Seeing the other players is how you know when someone else has something to add, and is bursting at the seams, but doesn't want to just rudely talk over you. It's how the GM knows if he's going overboard and boring the players at the peripheries of the scene. It's how you know you've lost someone's attention because their cat just vomited all over their desk, and that maybe you should pause the game for a moment while they clean up. Conveniently, there's a few easy video options out there. We've been using MeBeam. MeBeam is simple, and great for video. I've considered just switching over to it for the totality of the video-conferencing, because then we'd only have one program to worry about. The only thing stopping us is that sometimes mebeam audio ends up with excessive lag. Skype has less lag, but also crashes or disconnects more than MeBeam, so it's hard to say which is truly better. I'd say look into both (and maybe search the net for other options), and use whichever has the more consistent performance on your computers. But definitely use video of some sort, because the visual cues make it a much more nuanced and human experience.
Even with video, there's still some minor communication difficulties, as it is a little slower and more removed than actually gaming at the same table. I recommend using a very light rules system, and only gaming with people you trust. Now, honestly, I recommend that for in-person tabletop as well, so I may just have a personal bias. However, I've found that the technical hurdles of the various video conferencing programs make rules questions and arguments that much more annoying, so I try to use a system that minimizes them. Another option is to use a game system that has a solid online rules database. That way, since you're at a computer anyway, players can just bookmark the trickier bits and pop open a second browser window to look things up on the fly. Likewise, I'd choose a system with minimal die-rolling, so you don't have to worry about interfacing with some other die-rolling software, or rolling in front of the camera.
All this lead me to GUMSHOE for my online gaming. The system is transparent, almost invisible, during play, with rules questions almost never coming up. The few times that there is a rules question, they're generally about my Continuum-to-GUMSHOE conversion, not about the GUMSHOE core rules themselves. Die-rolling happens, but not with great frequency, and it's just a single d6 so repeated cheating would be easy to spot.
This post has gone on long enough, so I'll sign off for now, and return to the topic to talk about my specific campaign again at some future date.