I checked the tango video chat forums and they said they're working on a WP8 version of Tango but they gave no ETA. This is kind of frustrating that MS did not release the skype app alongside their W8 Version.
I have no problems with video calling on Skype with both my 920 and 820. I think the issues you are experiencing could be due to bandwidth problems with your data connection. Were you using mobile data or wifi? Try Skype again with a good wifi connection and this should indicate if the problem is with the phone and Skype or a data bandwidth issue. You could also try Skype again in a location where the mobile signal may be better.
Also note that poor quality could also be due to poor bandwidth on the other end of the call. It takes 2 to tango in this case.