Today, for the first time ever, I set up videoconferencing software on my laptop. The laptop came with a built-in 1.3 MP webcam and a microphone, so there wasn't much work involved.
Ekiga, the softphone that I'm using now, sees both my microphone and the webcam, and everything works great.
My last experience with videoconferencing was using Netmeeting in the late 1990s. I never owned a webcam, but I've seen others. Ancient codecs combined with 56k-modem speeds make for pretty crappy video. Today, with at least DSL or cable at both ends and with modern video codecs, the state of videoconferencing is great: both sides can see a smooth, unpixelated videofeed, with crisp and clean audio.
If you want to give it a try, give me a call: sip:pmw@ekiga.net.