I doubt corrupt video drivers would cause a blurry image. When you first boot your computer, before Windows loads, is the screen blurry? If so its a hardware issue, drivers wouldn't fix it. So you need to check the cable connections.
If it only gets blurry after loading Windows, then perhaps it is a driver issue. So reboot and just before you get to the windows loading screen press F8 a few times, a text menu will come up with some options, choose VGA mode and then see if it is blurry when Windows comes up. If its clear, then it is a driver issue.
If its 'blurry' can you make out anything on the screen? As in how blurry is this? Is it actually blurry or is the image totally corrupt? First thing I'd try is to remove/uninstall that webcam thing you think caused this. Then reboot, if still screwed up then:
If based on what I said above it appears to be a driver issue and you can make out stuff on the screen, you can try to do a system restore to a date before this happened. Start Menu -> Programs -> Accessories -> System Tools -> System Restore.
I know I typed a bunch of questions, if you are confused, just answer the ones you can.