Skype for iPhone has just been updated to version 2.1 and brings with it the ability to run in the background with iOS 4 and continue conversations even while switching away from the skype application.
Skype release notes state:
Run Skype in the background with multitasking in iOS4. Receive Skype calls and IM while other apps are running or when your iPhone is locked. You can also continue your call while you switch to another application. Multitasking is available only with iPhone 4 and iPhone 3GS
This update will definitely help Skype in its battle to remain the top VOIP contender. But the one killer feature that could put it on top is still missing. Video chatting is still not available on the iPhone version of Skype and there has been no announcement as to when it will become available. Considering the limitations placed on FaceTime (iPhone 4 and WiFi only), video calling in Skype could make Skype the de-facto video calling application.
As far as the current version is concerned, it runs and acts well. I was able to make a number of calls and use other apps while talking to other people. Overall the experience is almost identical to the built in phone application. When switching to the home screen while on a call, there is a red bar similar to the green bar used to return to the phone call.
This update is definitely a required upgrade for anyone using Skype extensively. Now we all just have to wait for Video calling.