Won't be capable until gingerbread 2.3.4 I believe. Even then, it will likely roll to phones in stages. (I believe that there was an article at one point)
Edit - with link
http://www.androidcentral.com/video-chat-officially-coming-nexus-s-android-234?style_mobile=0
So far, Yahoo Messenger with the video plugin is the goto app. I haven't used it, yet.
But i can say that if you have a strong signal and adequate lighting, Tango is a pretty sweet experience...
Edit: just tried Yahoo video chat... worked ok. But I was only able to broadcast the rear camera. Not very practical. Anyone know how to enable the front cam?