A picture may be worth a thousand words, but a demo video is often more useful when it comes to software, especially GUI. Of course text still rules and man pages shouldn't be replaced with "man videos", but demos are a great way to learn about an application.
Some products offered online flash introductions/tutorials, but most of the time they are impersonal and soporific. Recording of live demos are more interesting.
Channel 9 has been doing some (ex: Monad shell demo). But from experience, recording the person is usually not as informative as recording the screen or whiteboard. Jon Udell has been advocating this format: recording the display directly, along with a voice over commentary. And he baptized it "screencast".
I agree with him that this format is going to become more popular, as the tools democratize (Camtasia sells for 299$) or some free tools like vnc2swf become more user-friendly and efficient.
It's not only useful for application demos but also for recording presentations. The best recorded powerpoint-style presentation I've seen is Lessig on free culture. But even for less talented performers, recording presentations combining slides, voice and ink, would make them both remotely viewable and more lively.
You can record narrated Powerpoint presentations (using Producer for Powerpoint or Camtasia's Powerpoint add-in for example), but it would be nice if Powerpoint included a "whiteboard" or freeform ink mode. But you can also do that by including some blank slides in your presentation.
I recently made a screencast for some collegues with great success and it was received with enthusiasm. I used one of the tools that Jon recommended, Camtasia Studio, as it can be viewed on most platforms, using Flash. It convinced me that a lot of useful knowledge could be exchanged using this format.
My narration skills are not too good (yet ;-) so I had to record some parts multiple times and do some editing, but Camtasia made it quite easy.
Integrating the presentation with some transcripts would be useful for skimming through and text indexing, but Camtasia doesn't seem to offer this feature.
Try this freeware:
That application is amazingly efficient on screen capture - it's as though it's not even running.