And solution for Ubuntu

If you encounter seeing sluggish broken green screen in your Skype instead of the video, try to run skype like this:

LD_PRELOAD=/usr/lib/libv4l/v4l1compat.so skype

For 64-bit Ubuntu, the path may vary (probably /usr/lib32/libv4l/v4l1compat.so).
If your skype video works using this trick, you can create shell alias and put it into .bashrc.
This fixed my issue on Ubuntu 9.10 with Skype beta for Ubuntu, hope that helps.

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