I am playing Comanche v Hokum and was wondering if there was a way to look around the cockpit with the mouse or some other way.

Well, you've got three popular options:
TrackIR will cost you around $150,- but then you're all set.
FacetrackNoIR uses a standard webcam for facerecognition which works at the cost of cpupower and is somewhat less accurate, but hey its free.
FreeTrack is the choice if you like to do-it-yourself, can be just as accurate as TrackIR and is cheap to build.

for that TrackIR 5, do I need to wear something on my face?

So I installed the webcam one. I am running the software and clicked "Start" to initiate the tracking. What settings should I change in the game as well as the software to make this work?

Yes, TrackIR and Freetrack require you to wear either a LED or a reflector pointmodel.

As for the game I forgot that to enable headtracking you need to install the mod, headtracking didn't excist yet when this game was made, alternatively you could try to set the FacetrackNoIR client to mouse emulation though that might not work very well.

http://eechcentral.simhq.com/index.php?title=Main_Page

DO you have any experience using this game with track IR? what is it like?

I use FreeTrack myself, I think it's fantastic, it adds so much immersion and looking around is so intuitive, almost like flying a real helicopter, you can even use it to fire the turretgun.
Though I also admit that it's quite hard to set everything up when you're just starting with it, calibrating the camera to your pointmodel and setting up tracking sensitivities and curves, I even wasted a $30,- PS3 cam on it. XD

By the way, headtracking works in a lot of other games as well.

Do you know how trackIR compares to FreeTrack? What are the disadvantages of FreeTrack? Also I am not really into DIY because all the tools I have are duct tape. can I use a trackIR clip with the playstation Eye Camera?

I can't really tell because I've never used TrackIR, the biggest advantage I guess is that you don't have to worry about equipement because you start out with a good sensor and clip.
Though if you want to buy the clip only you'll need FreeTrack, TrackIR software probably won't accept third party webcams.
But if I were you I would first try with FacetrackNoIR, if you like that you can always decide what to do.

I tried FaceTrackNoIR with a simple webcam. I am not even sure that webcam gets 30 fps. When I use it with the game the input seems quite delayed

Try setting the sensitivities higher and perhaps the smoothing too, also make some curves that look like this.
The FreeTrack software is similar to that of FacetrackNoIR, it only differs in the way they get input, FreeTrack by a pointmodel and FacetrackNoIR by facerecognition.
Since I trashed my PS3 cam I tried a different one and I now use an Xbox360 live cam which is also 60fps albeit in a lower resolution, but it suits me fine as this camera is easy to modify, the PS3 eye can't be modified, hence I trashed it. =(
I post some picture of my pointmodels, one cap and one clip, I made the cap so I could use batteries as well as a poweradapter, the clip can only work with a poweradapter.

http://i790.photobucket.com/albums/yy189/Thunderchief/049.jpg
http://i790.photobucket.com/albums/yy189/Thunderchief/051.jpg
http://i790.photobucket.com/albums/yy189/Thunderchief/052.jpg

There are more and better examples on the FreeTrack forum.

http://forum.free-track.net/index.php?showtopic=466&page=13

I am using mouse look right now to look around thew cockpit. Is there a way I can have it behave like ARMA where it works only when I press alt. I am not able to aim with the chain gun on the Comanche anymore because it now just looks around the cockpit instead.

Look in the settings of the client, it should have controls to pause it.