I only needed a new webcam because while the Logitech one I had was fine it was too big to sit on my monitor, which is sitting under a shelf with only about 5 cm clearance, meaning that any video conversation I had with someone involved me having to look to one side of the monitor. I have had Logitech webcams since webcams were an everyday thing to have on a computer (to go with my Logitech mice and keyboards) and have been very happy with them, so I didn't buy one from another manufacturer lightly...
Unboxing
Too much packaging, but very nicely done. It takes a while to get the camera out of its nest of plastic and cardboard, and then the usb plug has the end covered with a friendly reminder to not unsheath it until you have installed the accompanying drivers. My machine runs 32-bit Vista Home Premium still since I haven't yet installed my Windows 7 in 64-bit and I do not know if this camera's software will run under 64-bit (I have seen reports on websites that suggest it will).
Hardware
This camera oozes quality, even at the price. While you probably won't be fondling it all the time unless there's something odd about you, the aluminium construction is solid and sturdy and a nice thoughtful touch is that the flexible strap for the back of the monitor can also double as a stand for the camera if the monitor top is just a bit too high (as it might be in my case, not sure yet). The cable to the USB plug has a built-in plastic wire tidy that's very nicely done too. The camera captures 720p video at 30fps according to the blurb and the built-in microphone situated on the top of the camera has noise cancelling features that seem to have worked well in test conversations I have conducted with
Software
The Lifecam 3.0 software weighs in a just over 300 MB on the CD, which seems excessive even for those used to Logitech's bloatware, but the Camera settings that pop up on the taskbar whenever the camera is in use - I will be almost exclusively using it with Skype - allows quite a few Augmented Reality-type tricks, like the stars that rotate above my head wherever it is in frame as shown below:
These, along with pan and tilt and zoom controls are available through the little settings window that appears when you left or right click on the taskbar icon. As you can see I have made my head teeny here:
You can get a much better impression of these in motion obviously. There is an odd lack in the software however. My Logitech camera offered the possibility to reverse the image to make it easier to indicate things without having to think too much (since we're all used to our mirror images), the Microsoft software doesn't have this feature.
Conclusion