MS Messenger works very simply and well for me. Basically it just works, with no setting up.
Make sure you're both on broadband tho', otherwise the video `part will be virtually useless.
Cameras and headphones are 10 a penny. Do use a headphone, you'll normally get horrible feedback with a mic and speakers.
I've got a Philips Toucam - the cheapest variety - it's fine for me. Logitech make OK cameras, as do many others. You only need a cheapish headphone set for a conversation - try and find one with a volume control in the wire - very useful!