But I didn't think that with my operating system (10.3.9) and the speed of my iMac (400Mhrz PowerPC G3) was compatible with the stand alone iSight camera (that is based on previous research and my horrible short term memory).
Your OS is more than enough, but the system requirements ask for at least a 600 MHz G3, according to Apple's site:
http://www.apple.com/isight/
(check at the bottom)
You can use this as an excuse to get a new Mac, or you can surely find an older one that'll fit the requirements without spending tons of cash.
The other concern I had with the iSight camera is the fact that you have to PAY to use AVchat. Is this your understanding too? I currently am a Yahoo user, and was hoping for a cam that could accomodate my mac and this format (without paying extra $)
Who told you that you have to pay? If someone told you that you had to pay extra, they flat-out lied. I video chat with my family pretty often (parents here in the States, sister & her family in Germany; three-way video chat, too), and there is absolutely no other charge besides what I pay every month for broadband internet.
Yahoo video chat (actually, ANY other video chat)
sucks in comparison to the quality afforded by the iSight and iChat AV. I've been "present" at parties back home by just hanging out on my webcam, and everyone who stopped by to talk was very pleasantly surprised by the quality.