How to make a time lapse video using a webcam
Time lapse movies are fairly easy to make. Using a webcam, Flix software, and a video edit tool like Windows Live Movie Maker, a time lapse movie can be made for very little money. Assuming you already have a functional webcam setup on your computer, here is the basic overview:
1) Download and install software to automatically capture images from your webcam. I've used Flix and it worked great.
2) Point your webcam toward what you would like to capture.
3) Start up Flix and set the appropriate delay between frames. If there is a lot of action over a short period of time, you might wish to go with a short delay (less than a second) while other subjects might only require an image every couple seconds / minutes.

4) Start recording
5) Stop recording after the desired amount of time.
6) Once you have all of the desired clips, start up a program like Windows Live Movie Maker and import the files. Once you have the images imported, you select all of them and set a desired amount of time that you wish each picture to be displayed (ex: .1 seconds each). Once you have the settings you like, save the project as a movie file.
Here is a sample video that was created using this process.