From Webcam Simulator:
Adds a virtual software camera to your operating system and allows you to use it as a real camera. Without even having a physical webcam, you can play pre-recorded video, photo albums in your favorite IM or video chat software. It can even broadcast one single movie to all the messengers at the same time. Already have a webcam? Webcam Simulator can switch to it easily, it can be used by several applications at the same time, and makes your video chatting more interesting. Virtual webcam driver: You don't need to buy a real webcam for live video chat. Fun and share : Share your video clips with family and friends. Wanna Try Latest (beta) : The latest Webcam Simulator 5.3 is posted after testing with Yahoo, MSN, Paltalk, CamFrog, Skype, AIM, AnyWebcam, and flash based portals on all Windows versions including XP, Vista and 2003. Click here to download it.
What's new in this version:
Version 7.3 may include unspecified updates, enhancements, or bug fixes.
This is some interesting software here. It's a great thing to do for fun. No you don't really need a green screen to put a custom background behind you. You can play any video file as your webcam, more informative then yourself atleast.
I decided to register it, that is how much I liked it. I'm using XP Pro SP3 and generally have little or no problems with Webcam Simulator. And YES it does work well with Camfrog Pro (I use the latest versions) and with MSN Messenger Live.