First thing to do is go to Device manager (Start > Run > devmgmt.msc) and check its installation. If the webcam isn't installed properly, it should be listed with a yellow sign under Imaging category. Right click it and select Update Driver, then let it update itself using Windows Update or Local Computer. Reboot the computer and then start Skype again and go to Video Settings. Make sure the webcam is selected in the list. If you have another imaging device, it might have been selected instead of the webcam. It should work afterwards.