The recent OS X 10.6.5 update addressed a number of issues in the OS, fixing a record 134 flaws, with 55 of them being specific to Flash. Despite these fixes, a number of people seem to have an issue with Flash not recognizing their iSight cameras.
Though the camera will load for a number of standalone programs like iChat, FaceTime, and Skype, if you are using a browser to interact with the iSight it may present an error stating that the camera could not be found.
People have found that this problem can be corrected by downloading and installing the latest Flash beta from Adobe's Labs download site. The Flash version that seems to work for people who have tried it is the second "Square" preview release that was issued September 27. Unless you use Safari in 32-bit mode, download the 64-bit version of the plug-in.
The main fix for this seems to be to install the latest beta release; however, others have noticed the issue still occurs if they have Google Talk installed. Therefore, if you have this issue be sure to update your installation of Flash, and uninstall Google Talk to get the iSight working again.
If you have additional issues with the camera, try removing any other third-party chat or video software--especially internet plug-ins--that could make use of the iSight camera. You might also try reapplying the latest Combo updater for OS X to ensure the 10.6.5 update is applied properly. To do this, download the updater from the Apple Support Web site and then reboot into Safe Mode before running the installer. Optionally, you might consider running a permissions fix on the boot drive and otherwise run maintenance tasks before running the installer.