VirtualEyez opens the iSight camera using shared camera mode and then provides a virtual camera driver that emulates the shared camera to all older applications that don't know about the shared camera. It's the ultimate webcam virtualization solution for Mac.
VirtualEyez also performs on the fly greenscreen compositing and brightness controls, allowing you to instantly create a cheap virtual broadcast studio for your podcast. VirtualEyez uses broadcast quality keying algorithms which means your greenscreen will look as good or better than what you see on television. Just be sure and use a professional greenscreen blanket ($50) and light the green backdrop independently. We cover this in our DIY greenscreen tutorial.
What's new in this version:
Updated for Mountain Lion and Gatekeeper.