Do a system restore to when you did not install the webcam.
1. make sure MSN is not running
2. make sure you uninstall any other webcam software you have
3. reinstall your webcam software, but do not connect the cam yet
4. turn off the PC
5. connect the webcam
6. reboot PC
windows will load the webcam driver on start up, it is likely that the driver has conflicted with your modem driver somehow and this should help.
Post back if more problems...