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Running this script with another camera runs without any issues.

Then that means your Creative720P live cam will return a not standard image format. Make sure you know which format is returned and capture it in the correct way.

Any idea what could cause the camera frames to go bad after awhile?

No because we did not get any piece of code. Also, if it works on another camera, it would be strange if it is due to your code, more likely its the grabbing interface.