Hello msnuser07, welcome;
Can you enlighten us with which version of Messenger and OS you use?
If you are able to view yourself in the wizard just fine, there may be a connection problem between you and your contact. Possibly a block by a firewall.
When you try inviting a contact to view your webcam, does the webcam only show a still image? In this midst of this, is your contact able to hear you through the mic?
Thanks for your question and hopefully we can resolve it!