Echo is mainly caused by using external speakers along with an omni directional microphone, which is picking up the sound from your speakers.
For best result with messenger-type chat, use a headset with its microphone.
I've seen some USB phone-thingies in OfficeDepot nowadays, no idea how well they work. I think Radio Shack also has them, marketted with Skype.
My wife likes to talk to her family in Peru (from the U.S.A.) but it's expensive. We have broadband and so do they. They do video conversations on MSN Messenger, but the feedback echos are unbearable. Are there any USB headsets or phones that we can hook up to the computer that would be good? (if anyone knows how to get rid of the echo that would be even more awesome!)
I'm not talking about something like Vonage that requires monthly subscriptions.