Check that you have the latest drivers for your webcam.
Also check that your webcam support VFW (Video For Windows). Look in your manual!
Yawcam uses VFW to communicate with the webcam, so if your webcam doesn't support VFW it will not work.
Have you tried to detect the webcam from the text menu? (settings -> detect webcam)
You can also confirm that your webcam works with the software provided with your drivers.