I've been struggled now for quite sometime trying to figure out how to get my stupid upside down webcam on my laptop back rightside up where it belongs but to no avail. Finally as of today, it works like it should.

For those interested, here's how I flipped it around.

$ wget http://people.fedoraproject.org/~jwrdegoede/v4l-utils-0.7.92-test.tar.gz
$ tar xvfz v4l-utils-0.7.92-test.tar.gz
$ cd v4l-utils-0.7.92-test/lib
$ make PREFIX=/usr
$ sudo make install PREFIX=/usr

After that I can fire up skype/cheese from the terminal like this:

$ LD_PRELOAD=/usr/lib/libv4l/v4l1compat.so skype|cheese

Or by editing the application launcher to include this as the command:

$ /bin/sh -c "LD_PRELOAD=/usr/lib/libv4l/v4l1compat.so skype|cheese"

Thanks alot Hans de Goede for taking the time and fixing this for me, providing me with the tarball mentioned above.

21 October 2012: I discovered the following official Ubuntu link How to get your ASUS U36SD running Ubuntu GNU/Linux.

Basically, in order to get the camera to not be upside-down in Skype, you have to do the following:

$ sudo add-apt-repository ppa:libv4l
$ sudo apt-get update && sudo apt-get install libv4l-0

Then run your application with LD_PRELOAD=/usr/lib/i386-linux-gnu/libv4l/v4l1compat.so in front of it, e.g. to run skype:

$ LD_PRELOAD=/usr/lib/i386-linux-gnu/libv4l/v4l1compat.so skype