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and the fps were fairly high I think ( more than 25fps).
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This could also be a cause. With the ToUcam, higher FPS means more compression to try and fit the data down the USB 1 interface.
When seeing is great, you should use 5 FPS so there's little to no compression of your original AVI by the capture software.
If you're using 25 or 30 FPS, the compression might be causing loss of detail and therefore less room to adjust the wavelets.