First make sure you have Skype version 220.127.116.11 or newer. Make sure you don’t have Skype open, then navigate to “~/Library/Application Support/Skype/yourskypename/”
Find the file called config.xml. Open the file and find the
make the changes in bold below to your file
Now, save the file and restart Skype. Go make a video call and it should be in a much higher quality 640×480.
Keep in mind you’ll need a good internet connection and a decently powered Mac to get a respectable frame rate.