Choosing the right type of camera for your interactive installation is one of the most important technical choices you can make in your initial planning phases. Making the incorrect choice can really impact how well your installation reacts to its victims and it can also impact its ability to perform robustly in a large amount of environments. You can always correct for certain things in software, but the hardware setup can often be the first line of defense against undesired behavior.
Whether you're working in Processing, OpenFrameworks, Max/MSP/Jitter, Quartz Composer , Cinder, VVVV, or really any artistically geared programming environment, your choice of camera can impact your work no matter the software. Some environments will give you more options with different cameras (maybe you need a Blackmagic capture card, or an IP cam, or a DSLR, or a Point Grey Firefly). Some environments won't have support for certain kinds of cameras, so do some checking before you think you can just plug your DSLR straight into Quartz Composer and expect it to be recognized. If the tool doesn't exist to port it in, there are a lot of technologies to do routing between applications (see CamTwist and Syphon for OS X ), so you may have some luck there.
Video projectors are one of the most important tools for creators of interactive installations. The information for projectors is available on various websites, but this 2 part guide will focus on their use in production and interactive environments.