I would imagine you need to have the PC talk directly to the web cam directly for live streaming. You may need a process on your pc, that combines the live feed from the web cam with the stuff from the Arduino (or just java/javascript in your browser).
Failing the ability of the PC to talk to the web cam, you likely will need to upgrade to a processor that can handle live video feeds. Presumably ARM processors (mbed, beaglebone, raspberry-pi, etc.) have enough memory and processor speed to handle it, but I don't know from personal experience.
If you just need to overlay some simple text over the video feed, you could use a video shield such as
http://nootropicdesign.com/ve/, and then have the PC accept composite video input, possibly through a TV card or frame grabber.