Just updated to Video Factory 2.0. Have both versions of VidCap, the new one, 2.5 and the previous one 2.0.
Both detect my camera (JVC DVX7) with no problems but only version 2.0 captures video. V2.5 does not show any errors but does not store any video (it can store still images though)
Make sure that you have the latest update for Video Factory. There were some issues with the initial release of Video Capture 2.5 that have been fixed with the update.