Sorry for the delayed response, I gave up on the issue after Apple phone support wasn't able to solve my problem.
I have a Macbook Pro, so the iSight is internal. It does not appear zoomed in when using Photo Booth, but it does in all other applications that I have tried. Imagine if the image was zoomed into the center portion of the iSight's view, that is my problem. For instance, while recording video in Quicktime from my iSight, the preview window appears zoomed in, but the resulting video file is correctly framed.
Even stranger, I have installed iGlasses and it fixes the issue for programs that it supports (Quicktime's video recording preview window is not zoomed in anymore). I guess I'm out of luck until iGlasses supports iCamSource. I've contacted iGlasses' developer and hopefully they will add support in a future update. Again, any help or insight into my problem is much appreciated. Thanks.