I think where I was going wrong first of all that I didn't notice that there was two drivers available. The camera driver that matches my camera (V6.32.00.004 - 800k in size) still caused my PC to freeze when using the camera and also refuse to shut down. This driver is the one that contains the Lifecam utility that you had problems with Warner.
The second driver called "BisonCamInstall" weighing in at just over 4mb allowed the camera to work correctly and my Asus is still behaving itself.
In short, don't install the 1st driver - it doesn't seem to add anything useful and just causes more problems than it's worth.
R2H Vista drivers