This is a well known bug in Skype, that keeps coming along every now and again in automatic "updates" that are supposed to "enhance" the performance of the software. Unfortunately, they can't quite get it right, and version 7.17 has the bug again. It's been there for the past few weeks.
See one list of threads about the bug here.
The "only workaround" according to Skype is to manually downgrade to an older version, 7.16 or earlier.
UPDATE: About an hour ago, Skype released a new version 7.18 which it thinks should fix the issue. "Skype 7.18 addresses some issues you have been reporting here on the Skype Community. In particular chat messages shown out of order [links to 3+ year old thread instead of any from the current round] and conversations staying as "unread" even when you have read all messages."
The new version can be manually downloaded from the website and installed.
Be sure to uncheck the defaults "Install Skype Click to Call," "Make Bing my search engine," and "Make MSN my homepage in IE, FF, Chrome, & Safari" if you're just trying to restore the basic idea that a text messaging system should present messages in order.
With the update, "Other changes include an updated selector for Mojis and emoticons which can now have separate sections. And of course we've also added bug fixes anf [sic] general stability improvements."
Old ideas of valuing simple, functional software that can do something specific, do it well, and keep doing it that way, are apparently just that: old ideas.