The videophone is an essential accessory in every comic-book vision of the future. It seems so logical to merge a television and a telephone that surely, one day, we will all be able to see granny as we talk to her. And with technology converging at a rate of knots, that day, surely, is nigh?

BT has been marketing a small videophone, the Relate 2000, since 1992, but it has had little impact. As well as poor picture quality, it suffers from the same problem as early telephones: there is little point in buying one if there is no one to call. That, perhaps, is why BT gives a discount if you buy two (pounds 749, instead of pounds 399 for one).

But BT has not given up. It has just launched a product called Presence, which has a 2.5in screen built into a phone. It gives better quality because it uses high-capacity ISDN (integrated services digital network) lines. But ISDN is used almost exclusively by businesses; Presence, as its pounds 2,500 price tag suggests, is not aimed at granny.

But it is a derivative of products that really are making an impact: kits that convert personal computers into videophones. These kits are selling fast: BT sold 2,000 in the three months after launching its product in November, and it is expected to drop its prices soon.

Several factors have hindered the development of video-conferencing. Screen images have been distorted, technology has been incompatible, and costs have been high. Each of these difficulties is now being overcome, but there still remains the task of persuading potential new customers to buy into the market. And there is still one big question to answer: is video-conferencing really useful?

Large corporations have used video-conferencing for many years - but they have had to install expensive mini-television studios in each location. Now several kits for PCs are available - from Intel, BT, GPT, PictureTel and others - which allow managers to chat with and see each other without leaving their desks.

The kits consist of a small camera mounted on top of the computer, and sophisticated software which compresses the data and provides a Windows- style screen interface. As well as a picture of the person you are talking to, you can share documents or photographs and work on them together - users take turn to control the cursor with a mouse.

The system still has drawbacks. On the Intel system the picture is not perfect. Neither is the sound: there is a slight time-delay on transmission reminiscent of early transatlantic phone calls. Speakers are not quite sure when the other person has finished talking, and occasionally talk over each other.

Intel's package is one of the cheapest available: the price has dropped by about pounds 500 recently, and now stands at pounds 1,549 for the unit, including video camera and software. In addition you need a modern PC. BT offers a choice of three software packages - from Olivetti, IBM and ICL - and costs pounds 3,300, again without the computer. But because the voice is carried across the normal phone network, sound quality is much better.

Companies are using this sort of equipment to avoid costly and time-consuming travel. Tele-interviews are becoming a crucial element in the appointment of overseas representatives. Lucas Industries has established video-conference links with component suppliers in Japan, reducing the need for executives to fly over to inspect components and packaging.

Philip Hamer, a solicitor, is enthusiastic about video-conferencing, which he has installed in each of his offices in Hull, Leeds, Doncaster and Sheffield, and uses for inter-office meetings. He predicts that within two years all medium- and large-sized legal practices will have video- conferencing facilities.

Video-conferencing is likely to become established in discrete niche markets before it is accepted as a general product. It is being used in education, both for isolated students and to widen curriculum choice. Kiosks with built-in screens, which allow customers to interrogate databanks before communicating directly with sales staff, are proving successful with banks and travel agents. And early trials for use in medical diagnosis are encouraging, allowing patients to be seen sooner by consultants, more conveniently and in the video-conference presence of their GPs.

But a lower-tech version of video-conferencing, called document-conferencing, could be a bigger growth area in the short term. Users can share documents, but cannot see each other: they need software costing about pounds 200 plus a modern modem. Some corporations use video-conferencing only for executives, while document-conferencing is available to less senior staff.

"The first step is document-to-document communication, and that could take off as quickly as the fax did," says Kevin Walsh, managing director of On Demand Information, consultants and IT service providers. "Video- conferencing is real; it is going to be with us. The key question is culture, and the operational reasons for using video-conferencing. Do people really want to adjust to a new way of working?"

BT has been researching consumer responses to video-conferencing, and says that there is little resistance, provided customers can perceive a clear benefit from it, and feel in control of the technology. Adrian Butcher, BT's manager for visual solutions, says video-conferencing could be given a real boost. "The accelerator will be working from home," he says. "Many people aspire to work from home, but feel unable to do so. This will facilitate it."

Martin Cooper, head of the human factors division at BT, says: "The overall experience is very positive. There is some interesting behaviour that the camera engenders. You see yourself [in a window on the screen], so people on video- conference take advantage of that to make themselves presentable.

"People can be less comfortable if they think they have no control over this thing looking at them. If you had a video camera which could be pressed into life and catch you unawares, people would not like that. We have been installing video technology in schools and spent time with teachers and children, and the kids love it."

Mr Cooper is convinced that a homes market will begin to emerge once people are convinced of the benefits. "If you want to know how your mother is, a picture gives you much more information. And you can show things to each other. I can show my brother the baby. A lot of things we are concerned about now will not be a problem for the next generation."