A company in China has successfully reverse engineered the Skype protocol. The unnamed company has created a client that is capable of communicating on the VOIP phone solution. They plan to roll out a 100% Skype-compatible client and release the source code for licensing. This will cause a terrible situation for Skype if this program gains any traction. But I must say that it's about time Skype has some competition.
What's more, there is nothing at all illegal or even morally wrong with what this group of engineers has accomplished, especially from the Chinese perspective. They reverse engineered a protocol that was not protected by patent. They will be seen as heroes in China and it is unlikely the government will ever take action against them. Skype has been playing dodge ball with the law all over the world in an effort to arbitrage third world telcos that charge high prices.