You’ve not mentioned an OS so I’ll assume Windows…
I’ve got webcams setup for the exact same thing. Slim pickings on the free (working) software front in my experience. In the end I started using windows media encoder 9 (its now been replaced by expression encoder 4 which I cant get to install).
The only downside (in my opinion) is that once its on, its encoding the video all the time instead of only encoding on demand. Although I use ultraVNC to connect and turn it on/off when needed.
To be different, I’ll go with “no OS mention=Linux”, or at least Linux-aware. Check out ZoneMinder. It’s a bit of overkill, but it’s a nice piece of software for casual surveillance. I’ve used it with network IP cameras, but it’ll work with webcams also. If you’re not running Linux, you can use the LiveCD variant and just boot directly to it.
Sorry for the stupid mistake- yeah Vista. I shall give the suggestions a try- and see if i can dig up or dl the software for my camera–I was thinking that might be my easiest free option but haven’t had a chance dig thru my discs yet.