i have the same problem, although for me the display goes wrong starting at 
800x600. 
Cheese version: 3.2.0-0ubuntu1
info from lsusb:
Bus 001 Device 003: ID 0c45:6416 Microdia 
Device Descriptor:
  bLength                18
  bDescriptorType         1
  bcdUSB               2.00
  bDeviceClass          239 Miscellaneous Device
  bDeviceSubClass         2 ?
  bDeviceProtocol         1 Interface Association
  bMaxPacketSize0        64
  idVendor           0x0c45 Microdia
  idProduct          0x6416 
  bcdDevice           a1.15
  iManufacturer           2 M092S-H02-0628-SC3TZ
  iProduct                1 Laptop_Integrated_Webcam_2M
  iSerial                 0

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https://bugs.launchpad.net/bugs/838739

Title:
  Wrong colors and lines with resolutions above 640x480

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