How does Facetime compare to normal video calling?
Entirely new? No - not really, but the quality is quite acceptable (I'd say it's better than most Skype video calls I've had) and it's extremely painless to use. It's also at the present time far more limited in audience (only iPhone 4's, iPad 2's and Macs) than normal video calling.

You can think of it as video calling built right into the OS with software that doesn't require hoops (no log in required) to jump through to use it.