rear view cameras automatically flip the picture, its in the lens.
an RCA camera will have a better picture than a USB based webcam solution. Sure you need a way to get the video in but it does make a huge difference.
Every webcam/usbcam that ive used, even the high end CCD ones all suck.
That being said a big concern when looking at a rearview camera is you need a wide FOV. 110 is ideal, you can do more. Expect to pay $60-$200. For a good rearview cam. I know that sucks.
Look at these threads
Rear View Camera Selection - Night
120 deg Wide-Angle Rear View Reverse Camera off Ebay - REVIEW
Backup/Reverse Camera, looks like a good deal for $50
[REVIEW] In-Bumper Rear-view camera
the last link has good pics and info.
as for software, if you get a winTV happauge based solution the ocx sdk allows you to do whatever it is you want with it. So making a custom solution would be fairly easy. As it stands though RR is capable of directly connecting to many camera sources. (IE my laptops built in webcam, or a usb webcam i tried, or a usb wintv with a camera plugged in i tried. So really the software doesnt matter much. No need to flip the picture since the picture will always be flipped. If you want a non flipped picture for a front/view camera then you can get a wide FOV normal camera cheaper.