I have had a webcam feed embedded in the main Flash based portion of my site for some time now (take a look here, click on the webcam option in the menu).  You might catch the top of my head in there during the day. I have been working on an article, to be published soon, that explains how to implement something very similar with Flash MX and ordinary household appliances. 🙂 You’ll be surpised how easy it is to do. The thing that really gets me excited is reading about Macromedia Flash Communication Technology  and pondering the possibilities. Has everyone seen this: The Dream Domain  ? It was the Macromedia site of the day on April 20th, 2002. Take a look through it and I’m sure it will trigger questions like, “How the heck did they do that with Flash!?” I also just today ran across this thread: “Flash Cam Test”  in the Macromedia Flash Handhelds Forum  Take a look at the example URL posted  in that thread showing off what can be done with Flash 5 and a Pocket PC. This is the kind of stuff that gets me excited about working with Flash. Keep an eye out for my article with example code soon.
Update: Someone else replied to the same thread. Take a look at this Flash based webcam of a lab at the Chungnam University in Korea