Well, if I look at this video :
http://www.youtube.com/watch?v=RP3eVNspKqM
Then I would say that your camera quality is quite good :)
You should see my cam xD
It`s horrible! xD
My phone has only 1.3 Megapixel cam (Nokia 6630, I have it 5 years already xD)
And the laptop, which I bought one year ago (and using it atm), has a webcam with only 1.3 Megapixels xD