Here's how I fixed it:
I went to
http://appleid.apple.com/ to try to change my username from <user> to <user>@<isp.com>.
It wouldn't allow me, because that username was already used(!!).
So I used the recover my account to recover the account with the username <user>@<isp.com>. I then changed it to <user>+bogus@<isp.com> along with it's email address.
I went back to my primary account and fixed everything there.
Now it works.
So, to summarize, it seems that FaceTime requires:
* A username of the form: <user>@<isp.com>
* A verified email address that is the same as your username.
What a pain in the butt.
Ciao!