Ugh – finally, after much backward and forward (even to the point I dragged out a Windows laptop) I’ve tracked down the issue which was stopping my embedded webcams (which otherwise works in all other applications) from working with the latest beta of Skype for Linux.
The solution is this (thanks Ubuntu Forums):
for 32-bit Linux / Skype
sudo mv /usr/bin/skype /usr/bin/skype.original sudo echo -e "#!/bin/bash \nLD_PRELOAD=/usr/lib/libv4l/v4l1compat.so skype.original" > /usr/bin/skype
for 64-bit  Linux / Skype
sudo mv /usr/bin/skype /usr/bin/skype.original sudo echo -e "#!/bin/bash \nLD_PRELOAD=/usr/lib32/libv4l/v4l1compat.so skype.original" > /usr/bin/skype
I found the command to build the script didn’t work out for me
$ sudo echo -e "#!/bin/bash \nLD_PRELOAD=/usr/lib32/libv4l/v4l1compat.so skype.original" > /usr/bin/skype bash: !/bin/bash: event not found
So, I built my own script
sudo nano /usr/bin/skype
and pasted in the lines to build the script
#!/bin/bash LD_PRELOAD=/usr/lib32/libv4l/v4l1compat.so skype.original
Of course, the script needs to be made executable
sudo chmod +x /usr/bin/skype
Then all that remained was to make sure no instances of skype were running, and re-launch skype from the menu.
For me, the video came up once Skype had loaded, from other discussions, some people may need to restart their machines.