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Magic Camera can easily create video effects on webcam. It can be used with all the popular chat software such as Windows Live Messenger, Yahoo Messenger, AIM, Camfrog, Skype, Justin.tv, ChatRoulette, etc.

The following effects are supported:

Photo frames.
Visual filters & transform effects.
Real-time replace webcam backgrounds with pictures/videos. (You can create fantastic effects such as raining inside your house!)
Add funny masks, noses, hats, eyeglasses by webcam face tracking.
Paint/doodle on webcam video.
Image overlay and video overlay.
Add cool Flash and gif animations to webcam.
Type text directly on video to "chat" with your friends.
Picture in Picture.
Video scene.
Customizable effects. (The source, position, size and transparence of most effects are editable.)
Open SDK. (Advanced user can develop complicated video effects using any programming language.)
Download free webcam effects packages from our website with simple one click.

You can set video files, photos, screens, DVs or TV cards as Magic Camera's content and then broadcast them on IM (e.g. Skype) or broadcasting sites (e.g. Justin.tv).