How to rotate Skype incoming video stream

Here are two threads full of solutions that worked for some people.

The funniest remark was that it is not a driver issue but an Asus one, because the camera is really physically installed upside-down. So one solution is to find a technician that can flip your camera. Or if the computer is under warranty, demand it of your vendor.

How to Fix the Problem of ASUS Upside Down Webcam

Solutions in this thread:

1. Modify WebCam setting, if the software allows it
2. Download a Webcam Driver from the ASUS support site corresponding to your hardware PID
3. Update Webcam Driver with Driver Detective
4. Edit registry at HKEY_LOCAL_MACHINE\SOFTWARE\Sunplus SPUVCb\VIDEOPROCAMP, set VFlip value to 1.

Built-in camera upside down

Solutions in this thread:

1) adjust the settings

Run the camera through the Windows Explorer. Your camera built-in will appear upside down, right?
Inside the folder with the drivers provided by ASUS there´s a software called tsnp2std.exe.
With your camera opened, run this application; you will notice a small icon in tray area; right click on it and now choose the option: Open Property Page.
Well, now you should not have problem to setup and adjust the settings.

2) Reinstall driver with flip

I resolved it by editing the snp2uvc.inf file. Open it with notepad and search for the word "flip". You'll see entries like this:
HKR,DefaultSettings,Flip,0x00010001,0 and HKR,Settings,Flip,0x00010001,0.
Change the last digit (zero) to a "1" to all instances. Save the file and re-install your drivers manually from Device Manager. Choose the driver to install, do not let Windows search for you.
Reboot and your video will be in the correct orientation.

3) Roll-back the driver to the original one that came with the computer

You need something that Skype recognises as a webcam, which I don't think is possible with VLC.

There's a freeware program called SplitCam which will let you stream a variety of sources to Skype.