Hey Sabrina,
You have asked the million dollar question among chameleon enthusiasts, and as Ryan mentioned, a search on this forum will provide you with plenty of entertainment for the night. There is enough controversial evidence for some people to take to either side passionately, and the anecdotal stories on both arguments are plentiful.
Here is one abstract (involving renowned herpetologist Dr. Gary Ferguson):
"Insects are known to be poor sources of preformed vitamin A, leading to the speculation that insectivorous species, including reptiles, may be able to convert carotenoid precursors to meet dietary requirements for this nutrient. This study was conducted to indirectly evaluate carotenoid and vitamin A metabolism in the panther chameleon (Furcifer pardalis). Eggs were obtained from females in Madagascar that were yolked either early or later in the breeding season, and carotenoid (- and -carotene, cryptoxanthin, lutein/zeaxanthin, and lycopene), vitamin A, and vitamin E concentrations were measured in egg contents in early, middle, or late embryonic development. An overall trend of decreased nutrient concentration as eggs matured (from egg period 1 (yolks) to egg period 3 (embryos)) was seen within both clutch groups. The season of clutch deposition was a significant influence on egg weight, -carotene, and lutein/zeaxanthin concentrations, but on no other nutrients. Chameleon yolks contained considerably higher levels of carotenoids than levels previously reported from two viviparous lizard species, and -carotene concentrations were of the same magnitude as reported in grazing tortoises. -Carotene and -cryptoxanthin were the predominant carotenoids in yolk and embryos, comprising about 95% of total carotenoids detected. Measurable concentrations of retinol at all stages of egg development in the chameleons suggests effective conversion from carotenoid precursors, with concentrations similar to those measured in other lizard eggs. Information from eggs obtained in native habitats may provide baseline data on nutrient interactions to improve and optimize captive dietary management; preliminary data suggest that micronutrient environments may vary over the protracted breeding season, with possible implications for embryo health and survival. Zoo Biol 21:295-303, 2002. © 2002 Wiley-Liss, Inc."
During an interview in 2008, Dr. Ferguson had this to say about the subject:
"I don’t know why the carotene in carrots couldn’t be converted. It could be that other carotenes in the guts of wild plant-eating insects can be. It could also be why panthers sometimes occasionally eat lizards and nestling birds, which should be a good source of retinol. I think it is a good idea to feed panthers large pinkies or small lizards, such as anoles, occasionally, if they will eat them. There indeed needs to be more study on this subject."
I have had the pleasure of meeting and talking with Dr. Ferguson many times (worked closely with his colleague, Dr. Gehrmann in a zoological setting), and I can tell you that if anyone knows anything about this subject (as well as D3 synthesis) it is he. Still, he admits that much more research must be done, and since his work primarily focuses on pardalis, it wouldn't surprise me if the answer to the topic differed among taxa.
Having personally dealt with varying degrees of hypovitaminosis A in chameleons, and having also seen the rapid effects of careful and systematic dosing of preformed vitamin A as an attempt to reverse of the condition, I stand on the argument that it is more likely that chameleons, at least the many species of montane, ovoviviparous chameleons I have kept over the years, do not make effective use of carotenoids in the conversion of vitamin A, and thus require, at least in captivity, of careful supplementation of pre-formed vitamin A. This is important because vitamin A, apart from the dangers in overdosing, may in fact have adverse effects in the synthesis of vitamin D3, and ultimately, in metabolic functions, so any administration of pre-formed vitamin A should be made very carefully and ideally, under highly controlled situations (and a vet).
Dave Weldon has written extensively about this subject, and has a fantastic perspective on the subject from the use of silk moth larvae. Perhaps he'll chime in if he sees this...
Cheers,
Fabián