PC Camera to work with

A good friend, Paul, has given me an IBM PC Camera (made by Xirlink) for Christmas several years ago. It was during the time of web cam craze. But I have never installed it. I had my share of fun on UNIX talk, IRC, ICQ, and other instant messangers during the wee-hours of the night in my college years. So I wasn't too thrilled of installing it and chatting my time away. Now, I'm thinking it would be fun to install it for experimentation purposes. Some experimentation I like to perform includes real-time remote capture of videos and photos around my home. At a minimum, my wife can use it to communicate with long distance friends and relatives.
I opened up the package and installed the software as directed. I was very careful to make sure I install the software first, before plugging in the camera. The catch is that the camera software was made to install on Windows 98 and 2000. I'm trying to install it on Windows XP. After installing the software, I plugged in the PC cam and launched the IBM PC Camera software. The software popped up a dialog box (see picture below), which said, "Video camera is not functioning properly. Digital Video PC Camera is not connected to this computer."