Microsoft webcam installation

I've purchased Microsoft Webcam to run on my Windows XP. After I install and then turn off the computer, when I switch on I get the message "New hardware detected", along with the installation Wizard. If I then open Microsoft Lifecam, I am told to plug my device into a USB port...which it already is plugged into. Sometimes when I unplug the camera and then plug it back in, it works ok. Sometimes it doesn't.

I have tried unplugging the Webcam, uninstalling the software, reinstalling it, then pluggin Webcam back in. Does not help.

What am I doing wrong?

I installed the microsoft vx 3000 and it worked great on skype..now it wont go to skype..it defaults to windows live messanger...i've uninstalled it 3 times, but even following all the instructions from skype ...what am I missing?