Update: Commenter Patriot17 left a comment on this topic (see below) that Vision Camera chat is possible with the new dash. We tried this out, and it does in fact work.
You need to pull up your friends list, click “Invite to Video Kinect,” and download an update. Once it is downloaded and installed (the latter caused a system crash twice last night), video chat becomes available. It appears differently than what was shown at E3, so either the interface was redesigned, or those with Kinect have the previously shown style.
Regardless, this article is retracted as erroneous. Continue on chatting, at least after an update. The original article appears unedited below.
The new Xbox Live Dashboard has debuted for some people, and surely they are enjoying the new look, ESPN, and expanded Netflix features. What Vision Camera (the other motion controlled camera Microsoft seems to have forgotten about) users will not be happy with is the deletion of the video chat feature. It does still exist, but only if you have Kinect. Apparently, the Vision Camera can’t handle the new software (theory).
The Vision Camera does still work with games, so Uno sessions still have video without Kinect. It’s rather odd the old video chat is gone. Let’s face it: the few of us who paid for that practically useless camera should get every feature we paid for. Since the best use was video chat and Uno sessions (don’t even mention Totemball), Microsoft has essentially eliminated half of its value. Of course, if you bought the camera specifically for video chat and never played Uno, the rubber guard on the bottom of the Vision Cam may make it work as a little doorstop. It’s stylish.
There is always the chance this feature could be re-instated for the full launch of the new Dashboard, although there has been no mention of it as of yet.