Windows 7: Webcam on Skype is cut into pieces

I've tried calling other people and the same thing happens every time.

Hello TenderNugget,

My mind reading capabilities are on strike today...
More general information would be nice.

What troubleshooting steps have you taken thus far?

Have you installed all necessary updates from Microsoft?

What version of Skype are you using?

Has the webcam EVER worked?

Have you uninstalled Skype, rebooted & reinstalled it again?

Have you looked for info on the Skype Support pages?

English - Skype Support Network

Video on Windows - Skype Support Network

What troubleshooting steps have you taken thus far?
- Reinstalled twice
- uninstall, delete all Skype related files, cleaned empty registry

Have you installed all necessary updates from Microsoft?
- Always up to date

What version of Skype are you using?
- The latest version off the Skype website

Has the webcam EVER worked?
- It has always worked, on the same computer, on the same operating system and on the same webcam. I think that Skype updated on time and I didn't use it for a good 2-4 months, then this happened.

Have you uninstalled Skype, rebooted & reinstalled it again?
- Yes

Have you looked for info on the Skype Support pages?
- Yes, and I have found nothing related to this.

Benjamin...
I suggest you uninstall the current version.
Reboot.
Install the prior version for testing.
See if that works.

FYI
I had a few problems with the newest version, returned via the method I listed & voila! > My problems disappeared.

Have you got the most up-to-date Drivers for your Webcam and computer?