My doubt was correct. It was all due to the blank device list. After lot of struggle I found this solution worked for me:
1. As soon as the plug-in tries to access webcam, it will show you "Adobe Flash Player Settings" box
2. Click Deny then Close to close it
3. Now press tab key on keyboard. It will highlight (in yellow) and show list of devices in video device dropdown control (This could be little bit tricky and you need to put little bit more efforts to see the list). You can now select your webcam as device here.
4. Press Tab key again to go audio dropdown and select audio device.
5. Then right click and bring up "Adobe Flash Player Settings" again.
6. Under Microphone and Camera tabs, make sure we select same devices we selected in 3 & 4 above
7. Come back to privacy tab and this time chose "Allow" and then close "Adobe Flash Player Settings" box
8. You should now see the camera images in the plug-in
Conclusion: This is a workaround worked for me. Plug-in is quite unstable and there is definitely something here Adobe Flash Player plug-in developers need to do about.
Hope this workaround helps many other users.
However, this workaround I can not make it to work for Google Talk Video chat (It uses web based interface hence uses adobe flash player plugin to access webcam)
In that case the plug-in doesnt shows device list controls hence we cannot go and select devices.
Adobe to tell what should be solution/workaround to this.
I have a similar problem. Shockwave crashes in all browsers regardless of what you are doing. Answer: My version of Shockwave is for the PPC platform, not the Intel based machines.
Possible source is the older CS3 Adobe Suite installed onmy imac. I'm still not out of the woods, but this scrap of information gives me a glimmer of hope!
Merry Christmas and Happy New Year!
Finally I found the culprit. And it was none other than Adobe CS4 products !
I uninstalled flash player plugin, unstalled *ALL* CS4 products one by one, deleted everything under "program files\adobe" (except acrobat reader) and everything under "WINDOWS\system32\Macromed\Flash" restarted machine and then installed flash player plugin.
Now the plugin works fine for Google Video chat, YouTube recorder etc.
Its wired to see Adobe Products causes trouble for each other.
Surely something to be noticed by both Adobe Dev and QA teams.