So far, I've either had the video fail to start, or only display the view from the back camera (that is, my desk and feet). If you press on your name in the list of Talk users, a dialog will pop up allowing you to enter a status message and set your status. Below that is a checkbox for Allow video and voice chats. You'll want that checked.
On the other hand, I still don't have it using the front camera despite this morning's Gingerbread update. The screen goes dark and stays there (until I press the back button); or the screen goes dark and then flashes back to a chat, refusing to even try video after that; or once I got the rear camera to work while my friend's phone rang, but he was away.
I'm hoping I can find some answers: this was the feature I looked forward to the most.
