It works on 3G and WiFi worldwide except in the USA (for some telco policy reasons, in the USA, it only works on 3G with Verizon).
Even though Skype is a proprietary VOIP platform, this is a big deal. It working smoothly on 3G as well as WiFi means this can help popularize VOIP on Android devices. Sure, Skype kind of worked with Truphone, Nimbuzz, Fring on Android previously, but Skype did sometimes block those third party apps from accessing its proprietary network. And sure there are open SIP based apps for Android like Sipdroid. Anyways, this is cool and awesome. I’m looking forward for Google Voice to be released internationally as well. More VOIP on Android may bring about cheaper Android devices that don’t even come with voice/sms packages anymore but which can do everything on Data networks only, and not even with compulsory 2-year subscription plans. You can download it to your Android device at http://skype.com/m/ or in the Google Marketplace.