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I'm having Suse11.1 as my host OS and have installed windows XP as guest under it. I'm able to see my integrated webcam working under Host machine . but not able to use it over my guest OS. Can any one guide me how to set it. Or why this issue occurs ? It would be a great help.

It's attached to your internal USB controller. The cam is USB, so it should be possible to pass it to the VM, but keep in mind that webcams aren't working all that well. Almost all of them give a black picture instead of video.