I have the same problem with the W7J, whuch has a built in camera. I checked the control panel devices and it is a recognised device, drivers are present etc. Nothing suspicious BUT I cannot find the On Switch or any software to get the WebCam to work. I sent in a technical support request for help...let's see what they say.
Btw Nish, do you have a W7J laptop and is the webCam working?
LATEST, Check out Microsoft technical support. It appears VISTA does not support high resolution webcams but XP does..and it's by design...can you beat that. So we have a 1.4Meg webcam that is not supported by VISTA!!!
Not sure if this is ASUS mistake or Microsofts'