iSight Camera not present on iMac
It seems there is either a bug with OS X 10.9.2 and a framework related to the camera or the way apps integrate with the camera. This has affected numerous people, mainly those with AirDisplay (due to the integration that AirDisplay provides — it's not really using supported APIs).

Until this problem is fixed, either by AirDisplay or OS X (for those suffering with a similar problem that seems to be caused by FaceTime), uninstalling AirDisplay and/or turning off FaceTime seems to fix it.