There is a known issue with mid-2013 MacBook Air, OS X Mountain Lion (10.8.5). If your Mac is NOT a mid-2013 model, this issue does not apply.
According to Apple's technical support article entitled "MacBook Air (Mid 2013): FaceTime HD Camera might not work after OS X 10.8.5 update", Apple is investigating this issue.
In the meantime, a 10.8.5 workaround is at http://discussions.apple.com/thread/5306216?tstart=0
Before you applied the 10.8.5 update, (or if your MBA is NOT a mid-2013 model) you could have used the built-in iSight suggestions from http://support.apple.com/kb/HT2090 to troubleshoot your FaceTime HD camera problem(s). After getting the camera working in OS X 10.8.4, if you use a mid-2013 MBA, applying the 10.8.5 update and the workaround should have given proper camera functions.
However,at this point, try resetting the PMU/SMC using the directions for
"Resetting the SMC on portables with a battery you should not remove on your own"
from the HT2090 page reset instructions for MacBook and MacBook Pro before applying the workaround.
If your MBA is NOT a mid 2013 model, consider the other HT2090 suggestions, too.
If your camera still doesn't work, or if the above suggestions seem more complicated than you want to attempt, contact Apple, your Apple retailer, or an Apple-Authorized Service Provider for service.
Message was edited by: EZ Jim
Mac OSX 10.8.5