I have been giving the new Linux Mint (based on the latest Ubuntu) a spin and encountered a problem with my webcam and Skype. The webcam is found and works well within cheese and other applications; however, Skype sees the web-cam but cannot render the incoming image.  I found the solution on the Linux Mint forums. To quote veanidon:

1) Rename /usr/bin/skype to /usr/bin/skype.real
2) Create a batch file called ‘/usr/bin/skype’ owned by root as follows:-

#!/bin/sh
export XLIB_SKIP_ARGB_VISUALS=1
LD_PRELOAD=/usr/lib/libv4l/v4l1compat.so skype.real “$@” 2>/dev/null
exit 0

3) Make the newly created /usr/bin/skype executable

After following these instructions the problem was solved.