DroidCam is a free app that uses your mobile phone as a webcam or microphone on your computer, using either WiFi or USB. You can use the “DroidCam Webcam” setting within various IM programs such as Skype, Yahoo! Messenger or MSN Messenger, or talk via “DroidCam Microphone”.
Now it support various video formats and higher resolutions, bluetooth, access via your browser (surveillance/ip camera), connect via 3G, camera flash, auto focus, zoom and more. Available for Android 2.1+. Android 2.3 audio is recorded in large chunks causing delays, thus not allowing DroidCam to stream and play-back smoothly.