Dimension E310 and Microsoft LifeCam VX-3000--BIG Problem

I've been using this combination of products for six months or so without any problems. My Dimension is about six years old and runs XP.

Suddenly (no notice) every time I try to open the webcam, I receive the following "initialization error": "The program will not start unless the screen resolution and color quality meet the minimum requirements. Right click in the desktop, click Properties, and then click the settings tab. Change the screen resolution tab to at least 800 by 600 pixels and the color quality to at least 16 bit." Needless to say I hadn't had the resolution anywhere close to that low (I've always had it at 1152 x 864 and still do). I've always had the color quality at 32 bit and still do. Every time I get this message I check the resolution and color quality and they are always at those settings.

I've uninstalled and reinstalled the webcam software twice and I've installed every driver update imaginable--yet no change. If I have to purchase a new webcam, so be it, but I'd like to try and exhaust every other possibility before I do (I'm cheap). I'm at the end of my rope and could use any assistance out there.

Many thanks!!