PC: To properly stream a Skype conversation on Ustream using a PC, you will need two mics (built-in mic on a laptop, plus an external mic; or an external mic plus a USB mic; or built-in mic plus mic on a webcam), and you will need WebCamMax which you can purchase for $30 here - http://webcammax.com/

Setup: in Skype, you set your mic to the one closest to you. To do this, click Tools -> Options -> Audio Settings. Set your speakers to the speakers in your laptop or the loudest option you have. 

On Ustream, set your Audio Source to your other mic, this should be between your speakers and you. This will allow Ustream to hear you and hear your caller.

To set up the Skype window on Ustream, install WebCamMax, make sure the Ustream broadcast console is closed, open WebCamMax, click Sources, set your main source to Webcam and select your camera. Then in the bottom, left click PinP Source 1, select Screen, set the mode to Specific Area. A red box should show up on your screen indicating the area that WebCamMax is capturing. Place that red box around the Skype video window and resize as needed. In the preview window on WebCamMax, move the picture-in-picture where you'd like by clicking and dragging.

Launch the Ustream broadcast console, set WebCamMax as your video source, and your other mic as your audio, and you're good to go!

Mac: The following link provides easy, step-by-step instructions on how to use Skype with Ustream, with the addition of a free program called Soundflower: http://educationaltechnology.ca/couros/765