I've used it and it's pretty good. The video quality isn't quite as good as on the Apple ads on TV but it's still very good.

At the moment, yes, both users must be connected to a WiFi network (unless jailbroken).

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MY99 WRX (Sold)
MY06 WRX 241hp 430nm atw (Sold)
MY09 BMW 135i 247kw atw (Current)