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Interesting idea. Since this is a bit less anonymous than Chatroulette, I'd imagine that there'll be less nudity and other shock imagery. Although, I'm sure there will definitely still be some.

I'm curious if any dating sites have tried (or succeeded) doing something like this. Seems like it might work - kind of an "online" bar atmosphere where you're free to wander around meeting new people face to face.

This may be the new trend on speed dating 2.0. It would be cool if you could choose the ambient where you want to hang out: Facebook, Twitter, BeautifulPeople, etc.
Making a white label random video chat service is probably viable as a business.

I have no idea how Chatroulette can afford the bandwidth.

According to that interview that was posted here with the kid who runs it; he covers all costs with a few ads on the page. No idea how, but I guess that it works for him.
They're using a new feature in flash 10: p2p.

Check the comments on the other news.yc thread about chatroulette.

the video streams are all client to client, all chatroulette handles is the session initiation.
I'm working on an open source Ruby implementation using the TokBox api.
I'm working on an open source Ruby implementation using the TokBox api.
Right now there are about 26 people online and I'd assume all of them are dudes.

These things do sound fun but where are all the chicks?

It just launched today and got featured on TechCrunch, a predominantly male publication. Give it time! :)
Anonymity of Chatroulette is key. This is weak.
I don't want to be matched up chatting with friends (I can do that anytime) and I don't really want total strangers (it gets creepy and dirty). However, this could be great if it connects you to friends of friends. You could then spend the time figuring out how you two are connected.