Well done on your 100......101st post lol.
Yes, a normal webcam will be fine, just make sure it has a standard resolution of 640x480 and seems of good enough quality. You can buy webcams really cheap now, so thats not a problem.
As for the software, if you don't like Yahoo messenger, why not MSN Messenger? Thats a free service too and can be downloaded from here:
That to me would be great for confrencing, and also allows microphone use, plus with the new version, you can go full screen instead of a window in the conversation box.
I hope this helps