I'm having this same issue. I've been using the webcam for about a year with no problems, but I moved it to a new computer and thought it would be a good idea to update the firmware when I installed the software (silly me). I followed the on-screen instructions,
and the webcam is plugged directly into a usb2.0 port on my motherboard, not a hub. I've tried everything suggested, along with every possible permutation of uninstall/reinstall driver, rollback/update driver, unplug for five seconds and plug back in. Tried
different usb ports, different computers. The device is just dead!
Audio still works, and unlike others, mine is still showing up as "Microsoft LifeCam Studio" in Device Manager.
I'm actually quite peeved off to have a webcam of this price bracket stop working due to a firmware update. What's worse is that MS have known about this issue for two and a half years, and not only have they failed to provide a fix that works for everyone,
but they have allowed the problem to continue happening to their unsuspecting customers. I mean, if they can't fix the problem with the firmware updater, why not just take it down so this doesn't happen to anyone else? The cam was working fine prior to the
attempt to update.
I also don't expect I would have much luck trying to take it back for a refund or a replacement after a year, so it looks like I've got no choice but to go out and buy a new (NOT Microsoft) webcam.