1. Make sure the driver is installed, the driver is the software that makes it work, sometimes these fail for no reason, so go to the laptop's website, go to their driver download area, find your laptop model number and download the webcam software and driver and install it.
2. Make sure there's nothing blocking it, like a firewall an antivirus.
3. System restore was a good solution as soon as you realised the problem was on, but you may still try, as long as system restore has any checkpoints left before the problem started.
4. Uninstall the program from Control Panel. Restart, Install it again, Install driver and it should work.
http://download.cnet.com/CyberLink-YouCam/3000-2348_4-10764658.html))))