Yes.
Usb should be fine, or firewire. What camera are you using? It won't recognize HDV if you are trying that. It has to be DV. Is your laptop recognizing your camera.
You can use the Ustream high Quality encoder or Adobe Flash Media Encoder. The Adobe is better. All the instructions are on " your shows" > Advanced tab.
As far as capturing a show. You would have to transmit it over Ustream and hit the record button after you start transmitting the stream.