I used a bunch of
http://www.dlink.com/products/?sec=1&pid=295 those last summer. They work alright. Image quality isn't exactly a revelation, and I don't know how well the software plays with browsers that aren't IE; but the price isn't insane, you can pan and tilt remotely, etc.
http://www.dlink.com/products/?sec=1&pid=410 is the newer and classier version; basically the same thing. Both should be available in a wireless version as well.
Linksys has something similar, I know nothing about it, though. Any of these have the advantage of having a webserver integrated into the camera. It'll just work, all by itself, no need for your machine to be on. On the other hand, this raises cost.
As for doing it in software, you'll obviously need a webcam supported by your OS, of the quality you desire, along with appropriate server software. I think some cams come with something(odds are it sucks, as bundleware does). A quick perusal of my APT repository (default Ubuntu 5.10 + Universe) suggests a few options(camstream, webcam, or webcamd look promising). I really don't have the heart to slog through the google results for Windows equivalents at the moment. I'm certain they exist, and are numerous; but I have no experience with any of them, and so no way of telling you which ones are utter tripe. From the looks of a few of the results that came up, many of them probably are horrible to the extreme.