This problem can occur in instances where an internal webcam is used on a laptop, instead of using a USB web cam, or DV camera.
If you are running Morae 3.0.0, please upgrade to the latest version of Morae 3 to improve stability for internal webcams.
Whenever possible it is best to use a USB webcam or DV camera for PIP.
Internal webcams often use generic drivers and these are not always reliable in Morae.
Another solution is to download the attached registry file. Double click to run it. It will prompt and ask if you want to add the information to the registry. Choose Yes. Then restart Morae and see if the same behavior occurs.