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Some people would consider it overkill to use a several hundred dollar camcorder as a Webcam, but there are two benefits. The optics in digital camcorders are much better than those that Webcams offer. Modern MiniDV camcorders are designed to take video in 720x480 resolution at 30 frames per second. In addition, camcorder lenses are designed to accurately reproduce color. Webcams, on the other hand, generally top out at 640x480 and 15 frames per second. Using a camcorder as a Webcam can actually save you money, provided that you have an unused camcorder lying around. Rather than spending $50 to $200 for a decent Webcam, you can use the free USB Webcam drivers for your camcorder or spend $20 for OrangeWare's WebcamDV software and convert the camcorder into a high quality Webcam. "
I've actually done this with one of my firewire camcorders and it worked great. One nice thing to get would be one of those mini tripods that are a couple inches tall to position it as you would a webcam.