When you're watching yourself, the computer is simultaneously constructing the image from the camera input and rendering it on the screen. These are both processor-intensive tasks, and have to execute along with whatever else the system is doing, including the background system-level stuff not associated with the programs you are running.
The chop results from a number of factors, such as the speed of your CPU chip, the amount of memory you have available (installed RAM plus the size of the disk swapfile, minus the overhead for system and application components), the version of the operating system, other programs you are running at the same time, and the video software itself.
I don't have any particular recommendations for the video software, but a few things that can help reduce the amount of work it needs to do for the video are:
* have the room lighting at a normal to relatively-bright level versus very bright or very dark so you can turn off automatic brightness tracking and low-light filtering.
* use a "medium" setting for the image quality ("sharpness") instead of "high" or "best"
* reduce the image size to 320x240 (or 640x480 if the camera supports 1024 or larger sizes)
* use a lower color depth ("thousands" versus "millions")
* if your camera supports both parallel and USB interfaces, try the parallel method to connect to the computer; if it's only USB make sure both it and the computer are running USB 2.0 or later.
If you're running a Windows machine, you'll want to give it at least 384MB of physical memory (RAM); 512MB or more is better. Also, be sure you are running the latest version (XP with Service Pack 2).
If you are on a broadband connection and the modem is connected directly to the computer, consider getting a broadband router to put between them instead, especially if the service uses PPPoE (for example, Verizon DSL). This is because the connection software is running in the computer and that can take a lot of horsepower away from other processes. The router handles the login tasks allowing you to disable the drivers on the computer.
As for what the other side sees, they may notice some of the chop, but it will be more affected by the quality of your Internet connection. If you're using broadband, you want at least 1500/384 service. Anything slower can bog down. For dialup, you will certainly experience extremely poor performance.
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