Using a Webcam as a Document Camera: Update

I got a chance to set up a cheap Creative webcam as a document camera in my class today, with mixed results. The images autofocused (conveniently) but with poor image resolution. It does seem promising as a in-class tool, though. Kids were interested, and by 8th period, I started to interact with the images using the Smartboard pens. So I think I can use this tool to replace/use in conjunction with the overhead projector. Hopefully I can work around the limitations of my current setup successfully.