I read about this issue http://forum.linuxmce.org/index.php/topic,13325.0.html
So created a file
setenv LD_PRELOAD "/usr/lib/libv4l/v4l1compat.so"
...but it hasn't changed anything unfortunately. I wonder if this is specific to USB cameras as opposed to composite cameras? Or is it for any camera under motion?
This has always felt like a permissions issue, but my understanding is that LMCE does everything as root anyway, so don't really know how to go about confirming this one way or the other. It is true that when I view the camera in mplayer I have to use sudo though.
Any suggestions much appreciated.