Skype uses a peer-to-peer architecture where each computer has equal capabilities as both a client and server. It allows for voice and video calls over the internet using protocols like SIP and RTP. Skype employs a hybrid P2P model with supernodes to decentralize functions like user search and directory sharing. Calls between Skype users can happen directly or through relays if behind firewalls, while connections to regular phones use SkypeOut gateways.