This Blit function worked better than ReadPixels. I'm pretty sure it's just an abstraction of ReadPixels, fullscreen quad, etc.
Anyway, this is how I took a snapshot of the webcam and copied it to another texture.
// temporary render texture to draw the webcam to
RenderTexture _rt = new RenderTexture(Screen.width, Screen.height, 24);
Texture2D webcamTexture = LiveTextureBinding.startCameraCapture (true, LTCapturePreset.Size640x480);
RenderTexture snapshot = Graphics.Blit(webcamTexture, _rt);
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