From the beginning, there was an obvious use for webcams. No, not that one. The use was putting on web performances of any kind. Early webcam sites were awful as far as implementation and performance went, but the concept was there. People created accounts and would set up what we would now call a live stream with a chat box thrown in. Frame rates were so low that it was almost pointless, but people were still fascinated with the notion of 'live' interaction.
Now, with all the innovations, streaming live has become big business. Sites like Stickam and Ustream allow you to stream shows live to millions of viewers, who get an interface where they can follow your show, chat, and be notified via email or instant messenger when you go live. Internet personalities like Chris Pirillo from Lockergnome and Kevin Rose from Digg have used Ustream to gather massive amounts of attention and fans, which in turn has led to revenue. And the great thing about most sites like this is that not only is their service free, but you can imbed their streams into your own sites, which means instant syndication of your show to wherever you can imbed some HTML.