The first method of turning a camcorder into a Webcam is also the cheapest, and you can't get any cheaper than free. Some camcorders, like the trusty Panasonic GS70, have a USB connection for a "Webcam" mode. Connecting the camcorder to the USB port will temporarily convert the camcorder into a Webcam of sorts.
The process is two-fold. First, you must install a USB camera driver that came with the camcorder. If you have lost the CD, then you can go to the manufacturer's site and find it. After installing the driver, you have to set the camcorder into Webcam mode. The technique will vary from camcorder to camcorder, as explained in the owner's manual.
The Panasonic Webcam was displayed as "Panasonic DVC Web Camera" on all the major Webcam programs such as Active Webcam and Yahoo Messenger.
The picture quality was pretty poor and looked about the same as the Creative Webcam Live! in the Webcam shootout.