Photo Sharing lets you share photos you’ve got on your iPhone or iPad with other Skype users.
There is no limit on the file size you can transfer meaning you can directly fire full size iPhone4S camera shots over to your friends to share your latest moment without running into issues with mail size attachments etc. In truth iOS does a good job of resizing images down in email anyway so this should rarely be an issue except when you absolutely have to send an image full size.
The performance enhancements include making Skype less battery hungry allowing you to leave Skype running in the background without killing your phone.
Skype have also improved the App so it starts faster and loads your contact list more quickly too.
Source: Skype Blog