While it's not an earth-shattering update, Skype for Android now has the ability to be stored on your phone's SD card for those running Android 2.2 Froyo. Skype says that moving the app to your SD card will, on average, free up about 15 MB of space on your device. Although the app will still store data on your phone, if you're tight on space, this will certainly help.
With Skype, you to make free Skype to Skype calls over Wi-Fi or 3G (although you'll still be paying data rates over 3G). You can also take advantage of Skype's low calling rates for making international calls.
If there is a downside to this bit of news it is that many owners of Samsung Galaxy S devices won't be able to take advantage of moving the app to SD since not everyone has been updated to Froyo.
Additionally, there is speculation that Skype may be looking to add video calling in a future update based on reports that the company is in hiring mode in order to shore up its mobile applications.
Skype for Android is available for free in the Android Market.