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Is this a good webcam? Its the Creative two-pack from Costco.

Every Creative I have tried has had horrible drivers and not worked worth a crap. Check out your local K-Mart for a clearanced Hue HD cam. I got one for my mom to Skype with my daughter and it works great, nice picture to boot. They had them for $15. I wish I would have bought another even though my notebook has one built in.
 
A camcorder would be a better webcam. You didn't mention price, so I won't go nuts with links. However, you should be able to find a used or refurbished model for about the same price as your link. You can also spend thousands.
 
I wholeheartedly reccommend the Logitech Quickcam Pro 9000. Supersimple to set up (I installed in on a 5+ year computer running XP without a hitch) and so easy to use with Skype that both my wife and mother in law can handle it. Costs around $75, but well worth it in my view.

As for picture quality, never messed with it too much but seems fine on Skype with no lag whatsoever, even though the person we are speaking with literally is on the other side of globe.
 
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