1. A method for operating a video communication system at a local site, the method comprising the steps of: determining privacy settings for a video communication event; establishing a video communication link with a video communication system at a remote site; capturing video images of a field of view of at least one image capture device; determining a video context based at least in part upon a determined contextual classification for the communication event; analyzing the captured video images to identify privacy sensitive areas in the captured video images, using a scene analysis algorithm which examines a content of the video images and image context characteristics of the video images based upon the determined privacy settings; modifying the image characteristics in identified privacy sensitive image areas of captured video images, to control the image and image context characteristics shared with the remote viewer, to an extent consistent with the determined privacy settings; and transmitting the modified video images to the remote site.