Any webcam will do. The newer ones have fancier features like head tracking which can be interesting, aggravating and with buggy software downright impossible.
I've found the simplest cams the best. Newer cams tend to have better resolutions though, higher capture rates.
We use Skype for videoconferencing with family members. Have for years now.
Free, decent audio and video. Software works right through firewalls, no issues with XP SP2. I have a router and run Zonealarm as well.
http://www.skype.com/ 
