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High oil prices have resonated through the economy at every level, and business travel is no exception. Realizing as much, I recently checked in with Cisco to see how well their telepresence product is selling.

Telepresence, for those who haven’t encountered it, is “a set of technologies which allow a person to feel as if they were present … at a location other than their true location,” at least according to Wikipedia. For Cisco, which took the word and slapped it on a product, that means an ultra high-end teleconferencing experience enabling one to see, as in William Prescott’s famous battle-cry, “the whites of their eyes”.

By the numbers, a Telepresence system generates some 20 gigabytes of video each second, which are compressed for transmission. The results are placed in high-definition 1080p resolution on 65-inch plasma screens, large enough to display a life sized person. Audio is multi-channel and spatially aware, so you’ll know which direction people are speaking from. And for just $300,000, you can have your own.

That’s a joke to an ordinary person, but for corporations that spend millions each year on travel costs, telepresence screens are quickly becoming a valuable substitute for in-person meetings. Other teleconferencing companies such as WebEx (now a Cisco company ) and DimDim fall short of a realistic experience. The systems have been used for soldiers to communicate with family members and home, and a potential next step is to move them into healthcare for remote diagnosis.

Cisco’s telepresence product has become the company’s fastest-growing product ever, at least according to senior director of emerging tech David Hsieh, whom I talked with on — what else — a Telepresence screen. There are now about 500 customers which, considering the price tag, is no small number. Most have installed multiple systems.

Even more interesting is the next generation of technology that is coming, which Hsieh was happy to speculate about. Right now, almost all Telepresence systems are set up to emulate small rooms, with around six to 12 participants. However, Cisco is working on a multi-point system that can support up to 72 screens and 300 people, enough for a company-wide meeting or small conference. A giant-sized version for use in auditoriums has already been demoed.

In a year or two, Hsieh believes a single-screen consumer product will be ready for around $35,000. This was recently echoed by CEO John Chambers during Cisco’s quarterly conference call. For those who can’t shell out the price of a nice car on a video screen, public kiosks will be available, starting a high-end hotels.

A little less than a decade ago, pundits were predicting a video revolution, which would take over our daily lives and have us all communicating by video messaging. Years later, it hasn’t happened, and moves like Yahoo’s almost $6 billion acquisition of Broadcast.com in 1999 look pretty dumb. But my feeling is that the high-end market success of Cisco’s Telepresence, not to mention competing products from HP, Nortel and others, have a deeper meaning.

Transportation costs are likely to stay high, so the business case for web communication will only grow, especially as companies become more international. Internet technology advances further, and the economics of video become better known. WebEx was certainly a success, but there could be even more potential for newer entrants, such as the aforementioned free web meeting service DimDim, but also video messenger Goldmail, and others.

For consumers, there’s also reviving interest in video for personal communication. Video chat service TokBox, for one, recently got more funding (although I’ve questioned the company’s potential in the past). There’s also the simultaneously lauded and maligned blog commenting service Seesmic, which is tangentially related. Multi-media messaging, some with video, is on the rise in mobile phones.

But part of what Hsieh suggested about Telepresence is that there are many uses that designers have yet to figure out for video, especially high-quality video. For a real video revolution, the new generation of innovators may first have to arrive.

In the first years of the 1990s, the attempt to push video chat to the masses got off to an ignoble start when AT&T released its VideoPhone 2500. For the low cost of $1500, you, too, could have choppy, grainy and essentially unwatchable video conversations with other similarly-equipped clueless people around the globe.

More than 15 years later, San Francisco’s TokBox has reduced the price of video chat to the cost of a webcam and a couple of clicks. A-list VCs Bain Capital Ventures and Sequoia Capital are impressed, and the two firms, with Bain taking the lead, have invested $10 million into the company’s second round of financing.

While video chat has been a feature of instant messengers for a few years, TokBox stands apart because it runs in the browser; unlike Skype or any other instant messengers, TokBox doesn’t require anyone to download anything to use it. If at least one user has an account, as many as eight other people can join a video conversation simply by visiting a url. The company shares some features with Imo.Im, which makes it easy to have video chats across your IM networks.

When we covered TokBox’s launch last Fall, the company garnered a fair amount of buzz, in no small part because Roelof Botha, the partner at Sequoia who invested in YouTube, had led the investment in TokBox’s first round. TokBox has kept products coming by partnering with web-based IM start-up, Meebo, to power its video chat and releasing a couple of applications, including a FireFox extension that adds TokBok to Facebook’s instant messenger and a desktop application built on Adobe AIR.

One catch, of course, is that anyone wanting to use TokBox for video chat needs a webcam, which many people still don’t have. But the bigger catch is that video chat, while great for getting some form of face time with those who live far away, doesn’t seem like a vital service. Furthermore, unlike instant message conversations, video chats require your full attention and, worse, force you to look at the unattractive or unclean people that call themselves your family or friends. That being said, TokBox’s ease of use is appealing.

Nick Triantos, TokBox’s CEO, says that the company’s growth has been strong, and has found some traction with job and dating sites — though neither of those are huge or lucrative markets when your core product is free. As for revenue, Triantos says that TokBox is currently focused on expansion, but might look to advertising or value-add services to generate cash down the road. He says that the company keeps its burn rate low and raised this money with most of the previous round still in the bank.

TokBox’s premium-brand venture backing won’t hurt the cause. Sequoia gives the company most of the connections it needs in the Valley and, as Triantos points out, Bain Capital’s large private equity arm opens doors to companies like Clear Channel Communications, in which Bain has a major stake. Bain’s investment also means Bain’s co-founder, former Presidential candidate, Mitt Romney, will return TokBox’s calls.

But will he use TokBox when he does?