If you have access to a Windows machine, you should see if the blue tint and darkness occur when you webcam is used on it. If the Windows-captured image shows in improvement then your Linux driver would be the cause. You might try using the 'force_rgb' parameter when insmod'ing your driver. There are some webcam models that mishandle the "palette" choice and send their data in RGB format when they should send it in BGR. I don't recall the details precisely, but I think they use palette 10 when asked to use palette 14.
Regarding recommendation for a "mid-priced" webcam, I would just point out that there are two main types of webcam: those based upon CCD (charge-coupled device) technology and those based upon CMOS (complementary metal-oxide substrate, IIRC) technology. The CCD webcam retail from about $50-150 (US) while the CMOS cams are usually available for much less. A CCD webcam provides a much better image and handles a wider range of lighting conditions. CMOS webcams will often only provide a 320x240 image while CCDs offer up to 640x480.
My personal recommendation would be to search for a good deal on a webcam based upon the Philips CCD chipset. There is a decent Linux driver for these and an enhanced set of controls
. I purchased a refurbished Creative Pro Ex for around $30 on E-bay (direct from the manufacturer) and have been fairly pleased with it.
If you decide to stick with the cheaper CMOS webcams, I would recommend that you "try before buy". If someone can make a recommendation based upon personal experience with a specific model, you might venture a purchase; however, there is a wide disparity in quality (even amongst different cams of the same model) and level of Linux support among CMOS webcams.
As a final caveat, be aware of the unfortunate similarity between model names of webcams. Cameras with very similar names can be entirely different in design and capability. For example, the Logitech QuickCam Pro
4000 is a great CCD-based camera, while the Logitech QuickCam 4000 is a markedly inferior CMOS webcam.