Unable to share webcam between XP and Vista

I (Vista) have been unable to share webcam with a friend (XP) - both of us
can neither send or receive webcam. On several occasions when my friend
invites I get as far as displaying adverts before the connection is made (eg
Justin Timberlakes new album - these ads are a new one on me?) but stick on
'Waiting for contact...' until finally timing out. My friends PC tells him it
is waiting for me (incidentally, he says he doesnt get any adverts - has my
Live been hax0red or does everyone else get these ads?)

I have another PC (XP) - we tried on this and webcam came up first time. The
only other difference I can think of is that my XP box is running NIS2005 and
Vista is running NIS2007. I have disabled NIS as part of the diagnosis but
the symptoms remain the same.

I have previously recieved Webcam on my Vista box with no problem at all,
but I'm not sure of the OS of that sender.

Any suggestions?

Thanks