how do I turn on the web camera for skype?

I have Vista and a dell system.  the monitor has a built in web cam. 

I recently downloaded skype and successfully completed calls.  I can see my caller but they only see some stupid cat talking away. 

I can turn on my camera to take video of my self and save it to desktop, but how do I get the avatar off the skype and have my image live on the call?