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ok this problem is caused by the wrong drive installed for the Crystal Eye Web cam.
even thoguh the camera shows that it is installed, the application looks for a specific one for the model you have. Unfortunatly Acer used 3 models of the camera without telling you which you have and calls all of them "crystal eye web cam"
go to acer.com select their support section and download all driver and applications available for the camera. you will need to try then 1 at a time til you get the one that works for your system
if the appropriate driver installed then the camera option comes on the my computer windows at the bottom. it means the appropriate camera driver is not installed choose the right one from list or install it from the cd come with ur laptop