HP webcam works but not with skeype 4.1

I installed the driver for my webcam using the compatibility mode (ran it as vista sp2 though) and now I can see my webcam under sound, video and game controllers section in the Device Manager BUT webcam doesn't seem to work with Skype 4.1. I installed skype using compatibility mode in the same fashion. Has anybody had the same issue?

Thanks

Does your cam work through any other software? There's website that can test it via flash if you need something to try

http://www.testmycam.com/