Cheese tries to generate thumbnails for files under ~/Videos/Webcam, when there are 0 byte larges files there (usually caused by previous cheese crashes) the thumbnail generation code hangs until it hits a timeout.
An update fixing this is on its way...
cheese-3.4.2-3.fc17 has been submitted as an update for Fedora 17. https://admin.fedoraproject.org/updates/cheese-3.4.2-3.fc17
Package cheese-3.4.2-3.fc17: * should fix your issue, * was pushed to the Fedora 17 testing repository, * should be available at your local mirror within two days. Update it with: # su -c 'yum update --enablerepo=updates-testing cheese-3.4.2-3.fc17' as soon as you are able to. Please go to the following url: https://admin.fedoraproject.org/updates/FEDORA-2012-9727/cheese-3.4.2-3.fc17 then log in and leave karma (feedback).
cheese-3.4.2-3.fc17 has been pushed to the Fedora 17 stable repository. If problems still persist, please make note of it in this bug report.