I think I found a 5$ webcam which can be used with Skype in Linux. I used Skype 2.1 with Ubuntu Karmic 64-bit.

The said webcam is this : http://www.dealextreme.com/details.dx/sku.13 . I am not 100% sure, since I bought a variant of it in India, but as long as the lsusb output shows

Bus 002 Device 010: ID 04fc:2001 Sunplus Technology Co., Ltd

you should be fine (the ID 04fc:2001 being most important).

One needs to compile and install the gspca drivers, as outlined here, but I have also checked in the .config file needed in my github repository.

On that topic, the GSPCA linux webcam driver makes for very interesting history, with one man having written 235 drivers! I’m not sure, who is the current maintainer, but hats off to all of them!

Guys, always buy UVC (USB Video Class) webcams.

Edit: By the way the Dealextreme product is pretty random in its choice of chipset - it sometimes comes with non-UVC class chipsets .. which then are a pain.