I recently needed a web cam for my desktop because I don't get to see my girlfriend a lot so we settle for web cam convos. I could have bought a cheaper camera for this purpose but I didn't want to. Now once again, I don't really use the camera for anything else so for me this is perfect, its true colour option is fantastic and really offers great picture quality, on top of that the focusing on this is amazing, you can show items up-close and it will be in excellent quality and have great detail. According to my girlfriend the camera quality is great on the other side, usually the syncing is far better on skype but the New Windows live Beta improves video chatting and even supports wide-screen and HD which is great if you have this camera.
For picture taking. I am a man, a real man and therefore do not stand in front of the camera for more that a few seconds to take a picture, but I will tell you that I have 2 teenage sisters and that they hate how the camera brings out the pimples and the imperfections on their face, they prefer the poor quality camera that's on my netbook, so if your looking for a camera that "makes you look good" I suppose based off of my sisters opinions, I wouldn't get this one.
The sound! I sing, and as for the Microphone, its really not that great for recording purposes but is is great for just web cam convos, probably better than most I've heard. I suggest you get a separate microphone for this purpose, however, I've heard that the software does not support a different mic and that you need a third party software to do this, which does kinda suck. For more info on this issue check out some youtube videos