That's for a Skype-to-Skype video call on the free version. If you're just using a Skype-to-Skype call for Chat + Voice only, then you have up to 25 people on the call.
I have been using Skype to RPG with my life long buddies for over six years now, and I've never encountered a serious problem. Although, we've only used the Voice + Chat functions of Skype and never used the Video function.
The group that I run a Roll20 game with uses Skype for the voice portion of our game, and Roll20 for the rest.