Every person I talk to who lives or has relatives out of the country uses Skype to communicate with their family. I used Skype and a webcam to have video chats with my kids and their grandparents that live far away. My brother and I have not talked live in months, but we Google Talk almost every other day. He even sends me interesting links through Google Talk. Some college kids I know instant message with their families to get daily updates. Or Twitter so their families can keep track of daily events.
But my dream is to get my whole family going on VOX to use as an online family newsletter, except updated more then once a year during the holidays. The privacy controls on VOX offer a safe environment to post family pictures and events.
But be careful not to expect your older kids to "friend" you on Facebook. I guess this is the modern equivalent of diaries, so kids don’t want their parents looking in. But in reality, anyone sharing personal information on Facebook is living in a glass house – so I suggest reminding them not to put anything online that they would not want a future employer looking at.