I'm sad Apple released 10.4.8 and still left the Photo Booth issue unresolved when is something so simple to get fix.
Now, this is how I fixed it! Try it at your own risk! (not that it's risky, just the warning protoco)
1. Download the Photo Booth file from this website:
http://www.apple.ru/cgi-bin/download_tiger.cgi (website is in russian, 1st field = email, 2nd field = First Name, 3rd field = Last Name)
2. Open the .dmg file but DON'T run it. It was proved by previous user that the installer could conflict with future updates due to the language mismatch.
3. Get the 'Pacifist' app (
http://www.charlessoft.com/) and use it to open the .pkg Photo Booth file.
4. Browse thru the .pkg contents and extract the Photo Booth app in any location you want except the applications folder.
5. Do a ctrl+click in the Photo Booth file extracted and select 'Show Package Contents', in the folder called 'Contents' look for another folder called 'Resources' and open it.
6. Copy the Video.qtz file and use it to replace the same file you will find in the Photo Booth app already on your Applications folder.
7. Open the contents of the Photo Booth app in your Applications folder the same way we just did and paste the Video.qtz file to replace it. You may want to back up the old Video.qtz just in case it doesn't work.
Thanks to John H for posting the link! And for the rest of the 'risk-takers'
iMac G5 (iSight) Mac OS X (10.4.7)