How can I record the webcam video & audio in a flv file to my local drive?
In AIR, you can embed Red5 media server (which is free) and use it to write the video locally. The quality is good and no bandwidth issues.
All the detailed explanation is present in my article at http://mydevrecords.blogspot.com/2012/01/local-recording-in-adobe-air-using-red5.html.
Also the link to the source code is present there.