Q: My iSight camera does not work. I open the Photo Booth, the green light stays on but appears: camera not connected. Can anybody help me?

Try resetting the SMC first, then the PRAM. 

To reset the SMC follow this article - http://support.apple.com/kb/HT3964?viewlocale=en_US.

To reset the PRAM follow this article - http://support.apple.com/kb/HT1379.

Another good 3rd party web site outlining these steps is - http://gigaom.com/2011/07/26/when-to-reset-your-macs-pram-and-smc/. and http://thenextweb.com/lifehacks/2010/12/04/how-when-why-to-reset-the-pram-smc-on -your-mac/.

- apple / about this mac / more info / system report - look in the area under "hardware" area, then USB.  Do you see your iSight or Facetime camera listed??

you may be having an hardware issue.  I would take the computer into your local apple store, and have them confirm that it is a hardware issue. 

They will be able to give you the service options. 

Try the suggestions mentioned in this thread - my isight camera is not working-not recognized with photo booth or ichat

1. Click on Macintosh HD on the top right of your desktop (or whatever else you’ve called your Harddrive)

2. Click through System > Library > LaunchDaemons

3. Now look for the file com.apple.cmio.VDCAssistant.plist  - and send it to trash.

http://www.appleware.co.uk/2008/12/03/isight-camera-fix.html

Take the computer to an Apple store or an AASP.  Whichever is more convenient for you.