You can download version 1.2.1 here:
http://skjm.com/icam/_old/iCamSetup1.2.1.exeI doubt it will resolve your problem, but it can't hurt to try.
If your problem is caused by the Microsoft security patch that I mentioned in my previous post, here's the latest info on that:
I tried to replicate the problem on my Windows XP computer, but it's working fine even with the latest Windows updates installed.
It seems like that patch may have introduced some problem with certain video capture boards. The patch description mentions AVI decoding, which doesn't seem to have anything to do with the video capture functions used by iCamSource. The only thing I could think of was the possibility that the capture card actually captures the video in AVI format, then transcodes the AVI data for the programs trying to access the video feed. Or it's just an unrelated bug introduced by the patch.