My local Gamestation (Altrincham) has loads of EyeToy webcams for just 50p.
They are a mix of the old black version (Logitech) and the new silver version (Namtai).
The picture quality of the camera is better than most other webcams I've tried and, though I can't speak for the Namtai ones, the Logitechs are great. 640x480, and comparatively good at accommodating changes in light level. They have a manual variable focus.
They're also quite a good looking unit in black and so could be useful in carputer applications etc.
Simply plug into a spare USB port and get the appropriate driver from here: http://www.iplayplaystation.com/eyetoy-as-webcam/
Hey presto! a great webcam for pennies.