I remember the "PicturePhone"... I was going to buy one as soon as they where available. Something went wrong, however, and along with those thousands of Popular Science covers it never made it to market.
I've been using the MBONE for a few years now. It's a cool experiment which is not quite ready for prime time. I think it will be at some point, perhaps soon. There's still some technology issues and many routing and policy issues to be solved but meanwhile the applications keep progressing.
The first application as audio. Next came video. I recently watched Vint Cerf give a talk from Japan as I sat in my office in Boston. It was great - I could understand everything and even view his graphs. I enjoyed the talk and almost forgot the technology which brought it to me (this is a good sign).
Now that sound cards and video capture cards are cheap (a reasonable video capture card is now $99) I would think that video conferencing over the Internet is going to increase. I ran into "cu-seeme" the other day. It seems popular in many circles (including, unfortunately people who like to sell sex). Mitch Kapor once said that it was pornography which made the VCR take off. No doubt chat+video conferencing will make the MBONE grow. Personally I'm happy not to have to board an air plane.