I'm having the same problem, the audio section of my iSight camera isn't showing up as an input option in FaceTime under Lion. I've opened a support ticket with Apple about this, and they're escalating it to an engineer (i.e. somebody high enough in the chain that they don't work on Sundays) although I suspect the only answer I'm going to get is that they stopped supporting these cameras several years ago, and I should be happy that I'm even getting video to work from it.
After opening the ticket, I kept playing with it, and noticed a few things which led to the following work-around.
You will need to download and install two programs:
- Audacity, a sound recording/editing program.
- Soundflower, a system extension which creates virtual sound input/output devices. These virtual devices DO show up as input choices within FaceTime.
The way Soundflower works is that two programs use the virtual devices. One program (in this case Audacity) treats it as an output device, sending audio to it. Another program (in this case FaceTime) treats it as an input device, and it receives whatever audio is generated by the first program.
What we're going to do is use Audacity's monitoring fuction to copy the audio stream from the iSight into the Soundflower virtual device, and configure FaceTime to read the Soundflower device as its audio input.
To set it up, first make sure both programs are installed. Then run Audacity, and...
- Go into Preferences, and select "Devices" from the list on the left.
- Under Playback, set the Device to "Soundflower (2ch)".
- Under Recording, set the Device to "iSight".
- Click "OK" at the bottom.
- On the "Transport" menu, turn OFF the "Overdub" option, turn ON the "Software Playthrough" option, and turn OFF the "Sound Activated Recording" option.
- On the toolbar at the top of the main window is a picture of a microphone. Next to that is a button with a triangle pointing down. Click this button, and on the resulting menu choose "Start Monitoring".
You should now see the audio levels moving, and reacting to any noise in the room with the camera. You may need to adjust the audio gain at this point. You should see two sliders, one with a speaker and one with a microphone, to the right of the audio level meters (or maybe on a second row of toolbar buttons, if the main window isn't wide enough to show the sliders.) You want to adjust the sliders so that normal speech moves the input meter (the red one) up to somewhere between -6db and -3db.
Once things are adjusted, leave Audacity running and start FaceTime. At the bottom of the "Video" menu will be a list of audio input devices. Choose "Soundflower (2ch)" from this list.
Now, when you make a FaceTime call, you should have audio, and the other party should be able to hear you. If they tell you that your audio is too loud or too quiet, adjust the input gain using Audacity.