Chicony WebCams are mounted upside-down in some notebooks (Asus G1S, B50A; Packard Bell EasyNote BG35 AKA Horus G2). Usually Vista drivers correct this issue somehow but XP drivers often give upside-down picture.

In registry branch: HKLM\SYSTEM\CurrentControlSet\Control\Class locate the entry with UVC WebCam

In Settings (not DefaultSettings!) change both Flip and Mirror to 1