Cheaper versions do work, but just remember that you get what you pay for.
The more expensive ones generally have higher resolution, and come with better software for using with the camera. Take a look at Logitech's cameras. I have also heard good things about the Microsoft LifeCam's.
If you go to my favorite online store, www.newegg.com
, they have a huge selection, and I generally trust the product reviews on there.