I am using the Microsoft Lifecam HD-3000 that came with FIRST Choice. I connect put the C++ "Simple Vision" example 
project on a freshly imaged robot. The video shows up on the default dashboard with "USB Camera HW" selected, but does 
not show up in the SmartDashboard. I get the same issue for the C++ "Intermediate Vision."

In SmartDashboard USB camera widget I get a "Error: Connection refused: connect." In the error log on the DS, I get  "
Error on line 188 of CameraServer.cpp: Incompatible State: The operation cannot be completed: Choose "USB Camera HW" on 
the dashboard at CameraServer::Serve()."

Its failing on this segment in CameraSever.cpp:
    // TODO: Support the SW Compression. The rest of the code below will work as though this
    // check isn't here
    if (req.compression != kHardwareCompression) {
      wpi_setWPIErrorWithContext(IncompatibleState, "Choose \"USB Camera HW\" on the dashboard");
      close(conn);
      continue;
    }

This may be related to this issue with java: https://usfirst.collab.net/sf/go/artf4011

These threads may be related:
http://www.chiefdelphi.com/forums/showthread.php?t=133682
http://www.chiefdelphi.com/forums/showthread.php?threadid=133928
http://www.chiefdelphi.com/forums/showthread.php?p=1436598
http://www.chiefdelphi.com/forums/showthread.php?threadid=132432