When you set your status to "View My Webcam", that means you are inviting friends to tune in to your broadcast. Friends can click on your status message to indicate that they want to see your webcam. Your will then receive your friend's request to view your webcam which you can accept or deny.
Check out webcams on Yahoo! Shopping to choose one for your computer. In addition, most major webcam manufacturers make them compatible with Yahoo! Messenger; just look for the Yahoo! Messenger logo on the package.
Need help setting up your webcam? Visit the Yahoo! Messenger Help Center.