There is not a FaceTime app for the iPhone as is available and included with the iPod Touch that includes a front and rear facing camera and the same for the iPad 2.
You must be connected to an available wi-fi network and the same for the person you want to have a FaceTime call with. The person must also have an iPhone 4, or an iPod Touch with a front and rear facing camera, or an iPad 2, and the iPod Touch or iPad 2 must be registered with FaceTime via an email address that you must have.
Or this can be done with a Mac as well running Snow Leopard or Lion with the FaceTime app installed.
http://support.apple.com/kb/ht4319
Message was edited by: Allan Sampson