Tried all that and it still doesn't work.

You made me think tho! Is there a minimum quality of image Live can work with? I am using a sony digital still camera which captures video at not brilliant quality at 640x480 at 25fps. Could Live be interpreting the "pixelyness" as motion blur and gettin confused?! I'm living abroad at the mo as part of my uni degree so didn't bring a camcorder with me! Infact would Live work with a DV or digi8 camcorder image or does it have to be as good as 35mm?

Below is the first frame of the video

Thanks for your help!

Simon