I want to capture demos of software applications. However I do not
want to install software on the demo computer. Instead, I would like
to have a separate computer capture the demo and save it to disk.
Later on, I would like to edit the result and place annotations over
the screen, edit out sections of the demo and basically clean it up to
make it look more professional. Then I would like to make the result
available for streaming over the Internet. Do you have any suggestions
or guidance for how I might do this? I am willing to spend some money
for hardward and software but I would like to keep the total spend
somewhere under $3000.00

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Clarification of Question by chef49-ga on 05 Nov 2006 11:22 PST

The demo computer will be a PC. The capture computer should be a PC,
but I am open to using a Mac if this will make life easier. I should
have said that in my $3000.00 cost limit, that does NOT include the
cost of the computer.

chef49...

If I understood your question correctly, you already have the
software you want to capture installed on the demo computer, 
and you want to use a different computer to create the demo.
This, and your mention of hardware, makes it sound like you
are thinking of using a video camera to capture what is
occurring on the monitor of the demo computer, with a separate
computer to capture the video. This is unnecessary, and, in
most cases will result in an inferior result.

Most capture software depends on having the software to be 
demonstrated installed and running on the same computer on
which the capture software is concurrently running.

To this end, you can simply install the capture software on
the 'separate' computer, along with the software you want to
demonstrate. Run them both and make the recording. Edit it
and you're ready to make it available for streaming, either
from a hosted website of your own design or from a service
which will stream the content for you.


Some sites and software that may suit your needs for capturing
active screen content and recording it, along with mouse moves,
or by way of other methods:

The Second Derivative website:

"The Great Demo! method enables organizations to create
 and deliver surprisingly effective software demonstrations.
 The Second Derivative offers workshops, coaching and
 consulting with a focus on the needs of organizations
 developing and selling business-to-business software."
http://www.secondderivative.com/index.html

Here's a 137-page article from The Second Derivative's
founder, Peter Cohan, available for $1 on The Marketing
Sherpa website:
http://www.marketingsherpa.com/barrier.cfm?contentID=3213

The same article is summarized on Jim Berkowitz's e-journal:
http://www.crmmastery.com/weblog/2006/03/27.html


TurboDemo ($299 - 799)
http://www.turbodemo.com/eng/index.htm


CamStudio (free!)

"CamStudio was originally released by a company called
 RenderSoft who were subsequently bought by a company
 called eHelp who used some of the technology in their
 program, RoboDemo ...

 Some time later, eHelp was bought by Macromedia who
 wanted RoboDemo (which was to become Captivate) ..."
http://www.camstudio.org/


Adobe Captivate (from $599)
http://www.adobe.com/products/captivate/


DebugMode's Wink (free!)
http://www.debugmode.com/wink/


BB FlashBack (£99)
http://www.directlearn.co.uk/bb/bb_overview.htm


That's the gamut of software, and should give you
everything you need to start creating and editing
your masterpiece!

If you have any questions, please post a Request for
Clarification before rating this answer.

sublime1-ga


Additional information may be found from further exploration
of the links provided above, as well as those resulting from
the Google searches outlined below.

Searches done, via Google:

"create a software demo"
://www.google.com/search?q=%22create+a+software+demo%22

"demo authoring" OR "tutorial authoring" software
://www.google.com/search?q=%22demo+authoring%22+OR+%22tutorial+authoring%22+software