This error means that the iCamSource is having problems communicating with your webcam.
First make sure that there are no other applications attempting to use the webcam at the same time as the iCamSource. Make sure that your webcam is plugged directly into your computer, and not into a USB hub. If it is already plugged directly into your computer, try plugging it in to a different USB port.
Next, try rebooting your computer. If you are still having issues, make sure you have the latest drivers installed for your webcam.
It is also possible that the registry key has somehow gotten into a bad state. Please download and run (double-click) this file:
http://skjm.com/icam/CleaniCamKey.regThat will erase the current iCamSource settings in your registry. You will need to re-enter all of your settings, but hopefully the problem will be resolved if it's due to a problem in the registry.