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Additionally, adding in some more info about where to get the programs and what kinds of cameras someone should by would be useful.The bar has been set pretty high for answers to Burning Questions so I just want to help your answer be all that it can be. I spent another hour or so on it, trying to incorporate your feedback.
Now hook it up to your computer with the included instructions (most of them are plug-in-and-use now) and move on to step 2! You will both need a Windows Live account, but it's free, and you can get it at the URL I just gave.
(It's hard to find a webcam without a microphone, actually, but if you're buying a really cheap one, do check!
) It's worthwhile going to a large computer store (Comp USA, Compusmart, Future Shop, Best Buy, or whatever's large and near you) to have a look, as they tend to have one of each webcam set up and connected to a computer, so you can compare image quality.
Some of the more expensive models do fancy things, like tracking (the camera follows you around the room) and have nice zooms, which may be useful, depending on your intended use.
I've included a photo of the Creative Web Cam Vista Plus, which is a really cheap, very basic webcam, which is Mac and PC compatible.