By Michael V. Copeland

PALM DESERT, Calif. — Video conferencing, along with 3D monitors and flying cars, is one of those things we’ve been promised for years, but have yet to get our mass-market hands on. At the high-end, Polycom (PLCM), Cisco (CSCO) and other specialty manufacturers offer dedicated video conferencing gear that looks great, but is monstrously expensive, often costing tens of thousands of dollars, if not hundreds of thousands, once the dedicated networking and data equipment is bought and installed. At the low-end are free or mostly free services, like Apple’s (AAPL) iChat, Skype (EBAY) Video, and various flavors of video chat riding on top of instant messaging. The problem with these is not the price, it’s the quality. The video is jerky, the audio doesn’t synch, and sessions either don’t connect at all (this happens to me with iChat all the time) or drop out just when you are about to display a new tattoo or a new grandchild.

At the DEMO startup conference on Tuesday, Hackensack, N.J-based Vidyo offered something in the middle. A high quality video-conferencing system that you can install and get running for $7,000. At the core is a $6,000 Vidyo router that you put in your server rack and connect to a broadband Internet connection. The system adapts to the highest quality the gear at each end point can handle, ranging from high-definition cameras to cheap web cams. So you might have HD in a conference room, and VGA from a home office, for example.Each site, or port as the company refers to it, that you connect to the router costs an additional $1,000 a year. So if you have two offices you need one extra port, but since it’s just a software connection you can add as many ports as you need. All that is required is a broadband connection. The $1,000 subscription is really a pricey seat fee. And it will add up if you decide to connect your dozen regional sales offices. The ports are fluid; they can range from one site to another, one home office to another, say, as needed all via a web-based system.

At a minimum of $7,000, this is clearly aimed at taking on higher-end video systems for corporate users. And Vidyo is a great alternative for small and medium-sized businesses that have been hankering for good quality video conferencing but couldn’t afford it. My guess, however, is that the pricing comes down fast. How long will it take for that Vidyo router (or something reverse engineered in Asia) to get to $1,500 bucks? And with no additional service fees for additional ports? Fast.The reason is Vidyo is also competing with free offerings, which while offering poor quality now, are rapidly approaching “good enough.” Once free, or almost-free services hit that point where they are “good enough” for most things, $7,000 looks like a whole lot of money to pay, never mind hundreds of thousands of dollars. Video-conferencing has long been held out as a $1 billion market poised to explode to a multi-billion-dollar market. It won’t happen until high quality video gets cheap. Vidyo is a big step toward busting the market wide-open, it’s still not cheap enough, but it’s getting close.

By Michael V. Copeland

PALM DESERT, Calif. — I’m down in Palm Desert, a long iron from Palm Springs, for DEMO, the twice-a-year startup beauty pageant (or horror show depending on how your six-minute presentation goes). DEMO, as the name suggests, is all about introducing mind-blowing new technologies and services. Not that every company succeeds in causing this hardened tech audience to elicit a collective “wow,” but already there have been a handful who’ve succeeded.

Online translation service SpeakLike is one. The New York-based service uses an instant messaging approach to offer live translation services while you chat. So imagine you have a colleague or a friend in Madrid. You both are logged into the service, in the same way that you might connect to Skype. Using the SpeakLike window you type a message in English, which is translated instantaneously into Spanish for your friend. His response, written in Spanish, is then translated into English. Each side of the chat views the conversation in the language they are most comfortable with using.

So far so good, but the “wow” factor came when SpeakLike CEO Sanford Cohen introduced a Chinese speaker to the mix. He had a three-way chat going simultaneously in Chinese (characters, not Pinyin), English and Spanish. The key to it working well, is that SpeakLike does its translation via not only machines, the sort of thing that Google Translate and other web-based services do, but adds a layer of real human translators to the mix which smooths out the often clunky and too literal results from machine translators. Think of it as a general session of the United Nations happening in your Web browser for 10 cents a message.

The company is getting ready to launch an invitation-only beta for the service offering translation (during limited hours) in English, Spanish and Chinese. It will add other languages and longer hours as it ramps up, both with venture capital funding and its network of translators. Ultimately Cohen envisions a global network of freelance translators, students or at-home parents with an extra hour here and there, to offer 24/7 translation in a multitude of languages and areas of expertise, say, health care or engineering.

The utility of the service is clear, says Dan Ahn, managing director with Woodside Fund a Silicon Valley venture capital firm. “Say you have an engineering team in India, a manufacturing team in China and your marketing in Europe and the U.S.,” Ahn says. “If everyone needs to discuss a problem, the way it happens now is you find the person with the best English, which is usually not that good, and everyone goes through these long, often inaccurate, conference calls. This gets rid of that, and lets the key people who need to communicate instant message directly via whatever language they speak.”

As SpeakLike gets rolling, the machine translation should also get better and better, says Cohen. “It’s mostly human translation for now,” he says. “But the algorithms will learn, and machine translation will account for much more of the work.”