If i have a live feed from firewire or such, is there any software that would allow me to manipulate it in realtime, and then output it, ie on a second monitor or tv out socket.

I need to add live video effects to the current video stream for live output.

What can I use?

I think what you're looking for falls under the category of "VJ" (Video Jockey) software. I know there are a number of packages available for both the mac and PC. A quick web search turned up the following; I have no experience with any of these however:

http://www.pixdisc.com/en/index.html
http://www.resolume.com/
http://www.arkaos.net/software/vj_description.php
http://freeframe.sourceforge.net/
http://veejay.dyne.org/

This site seems to provide a good roundup of many of the available products for both platforms:

http://www.audiovisualizers.com/toolshak/vjprgpix/softmain.htm

Try doing your own web searches for "vj" or "veejay" for more links. (Heh, a search for VJ also found the "Virtual Jerusalem" website ;-)