Dunno how else it's done, but you could use the weather graphic PHP script that makes things like Valentine's banner:
and edit it to use the web cam image. It's the same basic script I use to label my animated panorama:
Oh yeah, let's see... One other trick I learned for this image:
The text color is dynamic, in order to stand out from the varying background. I forget what I tried first to shift the color. I think it was a simple 50% shift of the 3 RGB values or something. But that makes the complement of gray, uh, gray, so the text disappeared into a foggy picture. So this is a different amount of RGB shift.
I just remembered, some people use ImageSalsa to do the overlay. Not sure if it's still available, and I don't think it's supported anymore.
If you go the PHP route, it will be a fun learning experience. It was for me, as you can see.