On my iPad 2 the camera does not work in facetime

On my brand new iPad 2 the camera does not work in FaceTime but it works fine in Camera and Photobooth apps. When I connect my wife's iPad 2 I can see her but she cannot see me. In the corner video box on my iPad 2 I see a still pic of me which is not even present in my album. My wife can see her face in the corner video box but the rest of the screen where my pic should be, is dark. Any help will be highly appreciated.