I went through three cheap webcams before finding one that would do Skype on my system (MacOS Tiger on a couple of different machines). They can be very fussy about both their software and hardware environment, so make sure before buying that it will work on EXACTLY the setup you have.

I still haven't figured out a free Mac-based solution for recording video with one. The microphone on mine (a MacAlly Icecam2) is surprisingly good. The video quality it produces in Skype would be adequate for simple YouTube videos, if I could only figure out some way to save it.