Camera latency + processing latency + display latency = vomit machine.

Not saying it's impossible just that it's a bit harder than slapping a camera on the Rift.

Your vision has some latency. I think it's a good bet that variable amounts of latency can be accommodated by your perception of reality.

It can be a single camera with a sort of picture-in-picture setup.

Check out this guy's project where he does just that using two cameras:

http://www.youtube.com/watch?v=Bc_TCLoH2CA

Seconded. After having tried the headset, that was exactly my thought. Just put a cam in front and a way to switch view quickly to be able to also see people with the headset on if you wish.

That's true. They already incorporated a camera, they should have put the camera on the head unit and the lights on some kind of light bar.

I think you'd have to put lights everywhere the camera might look. With lights on the user and a fixed camera, you just have to make sure the user doesn't move out of frame.

I'm sure they can add that in future releases, right now they're just trying to get the core product right at the lowest cost possible.

cameras you mean.