What's the best way to do this?
Bandwidth is a constraint (ADSL connection for them). Cost isn't (willing to spend up to $5k)
Thanks for your help!
Install skype on a computer in the play room, create a new account, and add your parent's skype account as the only contact on this fresh account.
Set skype to auto-login, auto-answer but reject calls from non-contacts - thus only your parents can call but when you they do the cam/mic will immediately turn on.
You could install a big monitor, better speakers, etc if you think that would help your son interact better with them.
I would consider the privacy issues, however, of having a dedicated always-on setup (rather than 'call in when you like'). Even from your parents, it would be like they are always listening in to what is going on in the house.
I considered setting this up for a similar project but I was concerned about doing 'always on'.
The best thing about this set up is that it probably will come in well below $5k if you already have a spare computer, etc.
I have got my best results on vlc both sides (stream from one machine to the other), videoconference is not 100% realtime (there is a slight delay of about 1 second) but the image quality beats skype on linux. I use different processes for sending and display video. I use a couple of cheap low power computers and microsoft 720p usb webcams. It is not perfect, the image quality could be improved, but it is filling an emational void.