I guess the problem is with the unavailability of the proper webcam drivers. I have faced similar problems (no output, skype not working, purple tint to the pics) using Ubuntu.
Feisty Fawn used to detect my 10 year old Logitech webcam and I never faced any issues with it; even Skype ran pretty happily. However, both Hardy and Intrepid failed to detect the webcam of an HCL laptop I was using until recently. Upgrading to Jaunty helped, but Cheese output always had the purple tint and Skype said that I had issues with my audio!!
So I am also curious to know as to what causes the color distortion of the webcam output. As far as Richa's problem is concerned, upgrading will possibly help.
As an alternative to Skype, you can use Voice chat supported by Empathy and now Pidgin also incorporates Video+Voice chat [
http://lifehacker.com/5340632/pidgin-26-adds-google-talk-video-and-voice-support] Anyone aware of any other alternative(s), feel free to share!
~kr0y
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~ Once you have flown, you will walk the earth with your eyes turned skyward, for there you have been, there you long to return --Da Vinci