Ok, i fixed my own problem. Actually, i fixed it a while ago but i thought i better post how i did it so the next person who googles for the this, will at least have a starting point. The only problem that remains is how the video and sound sync up. To say the least, not very well at all. It's off by 30 seconds at times. Apparently, this is a known issue with ffmpeg.
Here is the new command that will stream video and sound from V4L to the icecast server in the ogg format (theora video and vorbis sound).
ffmpeg -vd /dev/video0 -f mpeg -pix_fmt yuv420p -ad /dev/dsp -ac 1 - | ffmpeg2theora -a 1 -v 5 -x 320 -y 240 -o /dev/stdout - | oggfwd 192.168.0.20 8000 password /tv.ogg
This is what the ffmpeg FAQ said....
http://ffmpeg.sourceforge.net/faq.html#SEC4
"1.3 I get audio/video synchronization problems when grabbing.
Currently, the grabbing stuff does not handle synchronisation correctly. You are free to correct it. A fix is planned."
I guess it's just good for video right now. Oh well.