To update (in case anyone runs into this...)
I stopped trying to reach dell. I took the Mini apart, disconnected the webcam and restarted. It didn't recognize the cam (duh) then restarted. It recognized the cam and had the same problem.
I confirmed that the webcam had the correct part number sticker on the board.
I've also been having the Ubuntu wireless hard-freeze that others have been talking about. I installed a third party driver that was mentioned in the bug report (sorry, I don't have any links handy, but I found everything via the forums here)
Long story short, nothing worked. The computer was still freezing and the webcam still sucked.
So Dell realized that I had stopped trying to get help, and contacted me. They were still hesitant to help me until I mentioned that it was freezing as well.
They had me send it back to the depot for fixin'.
That is all for now, I will update when it returns.
I hope none of you have such a frustrating time getting your system running properly!!