My story was anything but. The webcam did get detected by whatever hotplug manager du jour is for Ubuntu. However Skype test call wasn't working. After a few hours of google searching -- there goes my Saturday -- I fixed the problem and here are my notes.
- sudo apt-get remove --purge pulseaudio (another sound server du-jour)
- System/Preferences/Sessions, uncheck Pulse Audio
- System/Preferences/Sound, set everything to ALSA, set Sound Capture to USB Device OSS
- Skype/Options/Sound Devices, Sound In -> USB Device (plughw), Sound Out -> Default, Ringing -> Default
Identifier "Configured Video Device"
Option "TexturedVideo" "off"