Ok this is what I did. I am using my iPhone 6 front camera. I bought iDevices-cam app (app store). After normal installation per the instructions by the app itself, I found the camera was lagging. But when double-clicking the iDevices cam inside OBS, you'll find the latency settings, which are Low and Normal. When changing it to Normal, and then back to Low, the lagging was very much gone. I have to do this every time I want to use the iPhone's camera. Also if your built-in webcam is lagging and blurry, chances are it is operating above it's real resolution (by software engineering they make it appear as being "HD" when that is not really the case). In my case I have a 1280x720 HD webcam. It was very blurry. But when I selected 800x600, the lagging stopped and the blurry was gone! Of course I lost the HD ratio, so what I did was to crop from the top and the bottom of the image by using the Transform > edit transform option. There I cropped the top and the bottom of the webcam image being displayed. I had to crop evenly top and bottom until the camera image was covering the whole screen space, making it 'HD-sized'. Of course the quality is not the same but the lagging and blurriness are gone.