Try adding the line c = cv.WaitKey(10) at the bottom of your repeat() method.
This waits for 10 ms for the user to enter a key. Even if you're not using the key at all, put this in. I think there just needed to be some delay, so time.sleep(10) may also work.
In regards to the camera index, you could do something like this:
for i in range(3):
capture = cv.CaptureFromCAM(i)
if capture: break
This will find the index of the first "working" capture device, at least for indices from 0-2. It's possible there are multiple devices in your computer recognized as a proper capture device. The only way I know of to confirm you have the right one is manually looking at your light. Maybe get an image and check its properties?
To add a user prompt to the process, you could bind a key to switching cameras in your repeat loop:
import cv
cv.NamedWindow("w1", cv.CV_WINDOW_AUTOSIZE)
camera_index = 0
capture = cv.CaptureFromCAM(camera_index)
def repeat():
global capture #declare as globals since we are assigning to them now
global camera_index
frame = cv.QueryFrame(capture)
cv.ShowImage("w1", frame)
c = cv.WaitKey(10)
if(c=="n"): #in "n" key is pressed while the popup window is in focus
camera_index += 1 #try the next camera index
capture = cv.CaptureFromCAM(camera_index)
if not capture: #if the next camera index didn't work, reset to 0.
camera_index = 0
capture = cv.CaptureFromCAM(camera_index)
while True:
repeat()
disclaimer: I haven't tested this so it may have bugs or just not work, but might give you at least an idea of a workaround.