Once I connected to my laptop, I came to know that it is not supported by the current kernel 2.6.27 which I am using, shipped with Ubuntu 8.10. Googling the issue on internet found that there are other compatible web cams are supported by the gspca driver pac7311. And also I found that there is commit in v4l-dbv project which supports this cheaper web cam also.
How long it will take for this commit to reach linux kernel. This link says this support will go into linux kernel 2.6.29 only. Till then what can we do with this web cam, we can use it as paper weight or you can install MS-Windows for this purpose. Apart from this, there is one more option to get it done. Exploring what this fix is about and patching the current kernel with this patch. That is what I did. You have to build your kernel for this.
Update to Ubuntu users:
Ubuntu has announced recently that vanilla kernels will be available as .deb packages in ubuntu Personal Package Archives. This archive includes release candidates also. These kernel packages are built without ubuntu patches and proprietary firmwares but with ubuntu’s default kernel configuration. Click here to download these vanilla kernels. So Ubuntu user can just install the latest 2.6.29 release candidate package to get the working web cam; they can skip the following steps to get it done.
The patch is very simple. The pac7311 module is having a list of supported hardware by this module. This list will be registered with kernel during module initialization. We are just going to add our vendor:device id also in this list.
Note: This is the problem with cheap web camera like this model. Though this model uses a well supported chip, it does not take care of getting itself (vendor & product id) added to its chip’s driver in linux.
Step 1: Download latest kernel from official linux site.
Step 2: Extract the compressed file.
Step 3: Run “make mrproper”
Step 4: Copy your current config file in uncompressed source directory as .config.
Step 5: Run “make oldconfig”
Step 6: Edit drivers/media/video/gspca/pac7311.c file. Look for
{USB_DEVICE(0x093a, 0x2621), .driver_info = SENSOR_PAC7302},
and add one more line as shown below to add our device and save the file.
{USB_DEVICE(0x093a, 0x2620), .driver_info = SENSOR_PAC7302},
Step 7: Run “make all”, “make install” and “make modules_install” to install the kernel and all modules.
Step 8: If necessary create a initramfs also depends on your distribution.
Step 9: Make necessary changes to in the grub or lilo to point to your newly compiled kernel.
Step 10. Reboot and you should find dmesg identifying your device when you plug-in web cam.
Now you can run any of your favourtie video application like cheese, skype to test how it rocks.
FAQs related to this HOWTO:
FAQ 1. My web cam is working in applications like cheese, but not in skype. In skype I get only green screen. What to do?

Skype video setting may look like this
Ans: To create a shortcut for skype with a fix is needed to solve this issue:
1. Create a simple script shown below with the name launchskype in your home folder
#!/bin/sh
export LD_PRELOAD=/usr/lib/libv4l/v4l1compat.so
skype &2. Set it as executable file. In file browser, right click the file and select “Make Link” option. It will create a link. Cut and paste this link to your desktop.
3. Double click this shortcut to launch skype. If it is prompted to “display or execute”, select execute (or make select as default action in nautilus preferences)
FAQ 2. Picture clarity is not good in these applications. How to tweak these settings?
v4lucp – Video For Linux User Control Panel is a GUI application which can do this. Just click here to download this tool. Compile and run.

v4lucp parameters screen
But this tool can’t save your settings across booting.
Update: Release 1.3 of v4lucp supports saving and loading of the settings with a tool called v4l2ctrl.

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