This is a built-in webcam issue in Ubuntu 10.04, that cheese can’t find webcam but lsusb command shows the device.

Bus 002 Device 004: ID 05a9:2640 OmniVision Technologies, Inc. OV2640 Webcam

According to bug reports, there's a temporary solution:

First, run gstreamer-properties command and make sure "Video for Linux 2(v4l2)" was set as default under "video tab -> Default Input"

Then, run following commands and now webcam should work.

sudo rmmod uvcvideo
sudo modprobe uvcvideo


If previous method stop working after reboot, you can try this script as auto-run at log-in (put it into /etc/rc.local)

#!/bin/sh

rmmod uvcvideo gspca_ov519 gspca_main vloopback videodev v4l1_compat
modprobe gspca_ov519
modprobe vloopback
modprobe v4l1_compat
modprobe uvcvideo