Cam being used by another application

"For what it's worth, I had this problem with a Creative HD webcam on XP SP3, and in the end (after much trial and error), I managed to get rid of the problem by some combination of doing all the following, probably doing all of them would be a good starting point for XP users.

Uninstalling all Creative WebCam Starter Pack software including the Webcamdriver and driver updater.
Reinstalling only the webcam driver, not any of the other Starter Pack software.
Installing ManyCam to get its 'Virtual WebCam' driver.
Reinstalling Direct X 9.0c, possibly it gets corrupted.
Uninstalling the latest version of Skype and going back to version 3.8.0.188, available from oldapps.com etc.
Setting Skype to use the ManyCam virtual webcam driver as its video display.
Everything will be OK now over reboots if you keep the webcam connected. If you reboot without the WebCam connected, you just need to go into ManyCam, without doing anything, and then closing it again, before you can use video in Skype again."