Hi, had the same problem if it's the cam from Argos before you do any setting up do the following:
1.Double-click the volume icon at the right-hand side of the taskbar.
2.Select "Options" then "Properties"
3.Under "Show the following volume controls" make sure all boxes are ticked, press "OK".
4.Under "Microphone" drag the volume slider to the top then exit volume control panel.
5.Start MSN, go to "Tools" then "Audio & Video setup" and set your cam up from there, just follow the prompts.
Hope the above helps, it worked for me,
Good luck..
Mac.
Mac
January 2007