I'm thinking about possibly trying lessons via Skype, so I want to ask if I'm understanding how it works before I buy more equipment, (I don't have a webcam for instance).
My present setup is; I'm playing a keyboard using midi into my computer via an audio/midi interface and I'm using a vst host program for my virtual piano plugin. I also have an SM-58 mic plugged into a mixer, Alt 3-4 Output out of the mixer into the Line Ins on the audio interface which goes into the vst host program. The output from the host goes out to the audio interface where it is converted back to analog audio and goes into a stereo channel on the mixer. The Mains Output of the mixer goes to powered speakers.
So, if I install a usb webcam on the computer, then connect to Skype, the person on the other end will hear my piano and me talking into the SM-58 mic,,, and I will see and hear him on my computer screen,, is that correct? And that's all I have to do?

If I am understanding you correctly, it should work.
I just replicated your set up,( using Alicia's Keys vsti in Kontakt) and made a Skype call to another computer in my home, and it worked ok.
You will need to be careful with your levels and mic placing, to avoid feedback (or just use headphones).

Before proceeding any further, you can check your audio capability, in Skype, under Tools>Options>Audio settings.
If all goes well, then just connect a webcam, and you are all set.
If all else fails, you could simply connect the audio out of your keyboard to your mixer.

Thanks Rob. I don't have feedback problems with this setup the way I'm using it,,,, but I don't know what it will do over Skype.
Can you tell me how I would connect a headset up since I'm not using the internal sound card. Those headsets have either usb or 1/8 mini plugs on them don't they?

With your setup, a mic/headset combo won't work, as the mic needs a small voltage to operate, which it gets from the internal soundcard ( this is not 48v phantom power, which you may have on your mixer).
You could just use a regular set of headphones plugged into the mixer, and turn down, or off, the powered monitors, should feedback be an issue.

OK,,, thank you very much.

I don't know any of the technical details of the gear you're discussing but if you're going to take piano lessons via Skype my advice regarding the technical setup is simplify, simplify, simplify. As simple as possible, if not moreso!

Skype is a compressed, low-fidelity way of communicating. A simple webcam and either headphone or basic monitor speakers will provide 10x better picture and sound quality than Skype can carry. Don't try to make your setup high-tech because it's wasted.

You need to be able to fully concentrate on your piano playing and what your teacher is saying or demonstrating. Get rid of elaborate pieces of kit that may need attention or provide distractions. Or that make take up valuable lesson time for troubleshooting.

As one who teaches piano and guitar via Skype, I must say that much of what Brent H says, makes a lot of sense.
All I ask, as a teacher, is that the student has a quiet environment that is well lit, and that their camera focusses on their instrument and hands.
It is the teacher's job to provide the technical enhancements.
I can instantly switch between multiple camera angles, and provide close- ups of hand positions, put up scores/tabs on the screen, or play audio tracks as required.
Skype is a great tool for teaching long distance, but I often find that providing a follow up video, that the student can watch over and over, is sometimes necessary.

As Rob reminds us, the best single thing you can do as a Skype student consists of a couple hundred watts worth of indirect lighting arranged so there are no shadows where the camera is pointed. It's amazing how clear a picture you can get from even a very basic webcam if the light is bright with no shadows to deal with.

I take lessons (England to USA) via Skype and all I have is a Webcam.

I have a floor lamp standing just to my left as I play with the webcam hanging from the lampshade ... directed down at the keyboard. It works fine.

I also use software entitled REPLAY TELECORDER for Skype to record my sessions. I don't actually use my recorded sessions much but it is comforting to know I can if needed.

The only issue I have is that the connection gets dropped periodically ... maybe once or twice during the hour lesson.

I am quite pleased with it.