Cheese in Ubuntu 11.10 started using the Clutter GUI toolkit, which requires working hardware OpenGL support. Unfortunately, your SiS card doesn't support enough OpenGL to allow Cheese to work. More GNOME apps plan to transition to Clutter over time (we shipped an older version of Totem in 11.10 because the newer version uses Clutter), so this problem is likely to get worse for you over time.

This may get resolved in 12.04 due to some of the work being done upstream on the software OpenGL renderer.