ID:183428
 
http://chris.pirillo.com/live/

If you look at his live webcam and use the chat what you type shows up ON the video.

Does anyone know how this can be done?

NOTE: if he's not streaming live, please check his recorded clips at the bottom to see the effect,

~Kujila
Didn't load the site fully (slow), but it looks like he's using Flash to stream the video. In which case it's a relatively simple matter of placing a text widget on top of the video widget within Flash, and updating it using Actionscript.
In response to Crispy
Or he could have used a screen capturing program such as Camtasia -- my friend has done it before. I don't know quite how he rigged it to work, but it was pretty cool stuff.
In response to Crispy
Yeah, but the service using to stream is "Ustream.tv" which, as far as I know, doesn't offer the service I see on his blog.

Thanks for actually replying though, I've been waiting a while for a reply :)

~Kujila