Using cameras for bullet motion and position detection will definitely not cut it. This is not WALL-E with Kinect for its head and even then image processing would be way too expensive and still slow for something as fast as a bullet, which travels at several hundred meters per second. Radars, lasers, lidars... probably.
Also, I'm not sure if there are actuators that can position an object that fast and, as mentioned, also the great amount of force transfered from the bullet without being damaged. I don't think it's really possible to catch a bullet any other way than allowing it to impact unless, I guess, the arms are strictly perpendicular to bullet's trajectory?
It would probably be easier to destroy bullets mid-flight using very high power lasers, like Lockheed's ADAM (but this for missiles, not projectiles).