Hi Andy,
We have done some (not All) of the things in EZ Jim's item 1) in that we have checked the System Profiler (Success) and another other apps.
You have already tried a PRAM reset.
If you don't have one already can you go to System Preferences > Accounts and create a New Mac User Account for Testing. An Admin one would be best.
Can you Start Up iChat and you can use the same Info you use in the usual Mac User account.
Does iChat work Here in Video Chats ?
Repeat for Skype ?
On Logging out of that account and back in your Main account I am a little surprised that you can start Video Chats but not get the message before the connection starts.
I am presuming it is a call started at the other end and from their end it appears to be an One Way Video Chat ?
It also sounds like iMovie and therefore Quicktime is "holding on" to the camera.
I take it iMovie is not an open app when this happens ?
You did not mention if anything was in System Preferences > Accounts > (your account) > Login Items that might be using the camera.
This would be apps and utilities that start up when the computer does.
iTunes Helper is normally in there.
You may have something for an External Keyboard or Mouse.
There may be other things that have been put there by you or by certain Installs.
Linked to this but most likely somewhat separate is apps that might be able to use the camera that you are unaware of.
Did Comic Book come Bundled with your Mac and is it Open ?
Obviously any other IM app that can Video ?
You said in the first post that the Audio was also choppy.
What Setting do you have in System Preferences > Quicktime > Streaming ?
Essentially this is the speed at which the computer uses to watch On Line Video.
iChat also uses it but has issues with the Automatic Setting (reads it as only 384kbps in Leopard) and the top setting (but lowest in Drop down list) of Intranet/LAN
It is worth setting this to the 1.5Mb/T1/Intranet/LAN setting and restarting iChat so it "sees" the new speed.
Check also what Internet Sppeds you are both getting, both Up and down
http://www.speedtest.net/ (use yellow star and pick one if any in drop down)
You should see at least 80% of what you think you pay for.
Can you also open up Console ( Applications/Utilities)
This should default to displaying either Console or System Messages.
Either will do.
If iChat is open can you Quit it and then restart it.
Do you get any Messages in Console about the iChat Camera ? (May possibly say the count for cameras is below 0)
That should be enough to be getting on with 🙂
10:57 AM Wednesday; September 1, 2010
Please, if posting Logs, do not post any Log info after the line "Binary Images for iChat"