I'm unable to reproduce this problem on maverick. ~/Pictures/Webcam is used 
here.
Is this on a fresh install? or an upgrade?

What does gconf for "/apps/cheese/photo_path" say? 
The default is blank . "Defines the path where the photos are stored, if empty 
"XDG_PHOTO/Webcam" will be used." 

So maybe, if this was an upgrade, the earlier versions may have set it for 
~/Webcam and that got carried over during serial upgrades or you had changed it 
a while ago and forgot about it. 
(But I'm kinda sure that if it is an upgrade, the version might have been older 
than lucid atleast.  I'd done a fresh install during lucid and this isnt a 
problem there) 

** Changed in: cheese (Ubuntu)
       Status: New => Incomplete

** Changed in: cheese (Ubuntu)
   Importance: Undecided => Low

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https://bugs.launchpad.net/bugs/713021

Title:
  Cheese creates ~/Webcam even though it saves to ~/Pictures/Webcam

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