This is obvious -- except it hadn't occurred to me. I've heard of using a webcam to monitor grandma (my mother would just love that), but of course it works just as well for Fido: Home petcam made easy.
There are several security issues. A wireless webcam may not support robust encryption standards. If you are uploading images you need a place to access them -- and most of the upload sites are a bit ... unseemly. If you are accessing the webcam directly then you run into serious security issues -- it needs to connect to the DMZ of one's LAN...
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