First of all, to lessen the flicker, if you can turn auto-exposure off with your camera, do that.  The next thing would be to focus manually as well.  The auto-focus on your camera has left everything slightly out of focus.  I've never used a life cam before, nor do I know much about it, it may just turn out to not be a very good camera for brickfilming.  Before giving up all hope, take a look in your camera settings and see if you can switch to manual focus and exposure.  What software are you using for animation?  The settings might also be found somewhere in that program as well.

I hope that was a little bit of help, and hopefully something can be done to improve your camera's quality.  You can still make entertaining films with a crappy camera, though I understand that you want to get the best quality possible. 
Welcome to bricksinmotion by the way,

- Yo-Blob

Welcome to BiM (like the Username, very clever).

The LifeCam is known for being a FAIL animation camera. If you're willing to spend some money, get the Logitech QuickCam Pro 9000. Its the best webcam for Brickfilming known as of late. It costs $100, but you can get it for around $70 through the Skype store.

A side note - Yo Blob, where you been?

"actuallly this involves spiderman too, not batman. but im also taking a new approach, more comedy, less action. i dont see to many movies like that with more comedy than action" --SteveStarfyTV on an Indiana Jones meets Star Wars idea.

Yup, this is what I'd recommend. On another note though, make sure your sets and camera are immovable while filming (there's several different QC9K cradle designs around the site).