I'm running MSN Messenger 7.5 on Win XP SP2, and I have a Watchport USB camera. I installed the iucam220 file. After rebooting the computer, when I go to MSN's webcam configuration I see that the webcam is working. Yet when I try to open a video conversation, it fails. When I then go back to the webcam settings, I receive an error that the webcam is being used elsewhere.
The webcam does work because I see the video (and can record) in VDub, but, for whatever reason, it's just not working in MSN or Skype (I tried that too).