Does facetime work over Wifi only, or also over a cellular connection such as 3G?


No, you need to jailbreak your device to enable Facetime over 3G as of iOS 5.

Here's an extract from the official documentation:

With FaceTime, you can participate in video calls with another iPhone 4 or later, iPad 2, iPod touch (4th generation), or a FaceTime for Mac user over a Wi-Fi network connection.

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