Camera Support for Web Based Encoders in OS X Lion
From Livestream » User Guide
If you have upgraded to the latest version of Mac OS X (Lion), you will encounter some problems activating the Camera and/or Microphone when using Studio, Webcaster, or Twitcam to broadcast. Below are instructions on how to get around that until the issue has been resolved.
1) Right click on any Livestream Player or Flash Object and select "Global Settings".
2) Click on "Camera and Microphone Settings by Site…"
3) Click the "+" button on the lower left hand corner.
4) Add "cdn.livestream.com" and set the permissions to "Allow".