CamTwist is an application that allows you to add special effects to webcam video.  It works with services such as Stickam.com, Justin.tv, Ustream.tv, and Skype and adds effects like bubbles, flames, earthquake, and bullet holes (sweet!).  It requires OS X 10.4 and is completely free to use.

I don’t own a Mac, but thankfully I found a screencast put together by David over at Tech-Recipes.  There’s a YouTube video below and a higher resolution video here.  If you know of any Windows compatible software that compares to CamTwist, please share in the comments.

[via Tech-Recipes]