Bought a webcam from eBay for $23 -- yes one of those $0.01 win + $22.99 posted from China. Very average cam at this price point -- 350k pixel CCD that does 640x480 at 15fps or 320x240 at 30fps. Powered by USB with a built in mic, it also sports 6 LED that emits weak blue'ish light when its top senser detects darkness.
It installs as "Vimicro USB PC Camera" (which I guess is the processor inside). Quality is pretty lousy. Serious lag, and image is noisy at low light. I guess that's what I should expect at that price point anyway.
By the way, Skype 2.0 final was also released today. It is still the same VoIP over its P2P network, but this time it adds video phone support, so that you are not only going to get free phone calls, you are also able to see the person you are talking to. I guess video phone has already been popularised by other IM networks like MSN, but Skype has its "firewall penetration" advantage -- I can even use it at work with nothing but port 80/443 through ISA.
My Skype ID is on my contact page. Don't expect me to have video up all the time though :)
What other use is a cheap webcam?
UPDATE: Due to popular demand, the driver for my webcam is here: vimicro-pc-camera-301x.zip (ZIP, 1,912kb)