Voicethread - records annotations on images you upload where you and others may annotate and add your voice and writing. Our new By Grade mathcasts library is built on the use of VoiceThread (and TechSmith's SnagIt for image capturing).
Jing - free from TechSmith. Easily record and share screen captures or screen recordings of up to 5 minutes. Share them either by using TechSmith's screencast hosting service - Screencast.com or simply embed the Flash (swf) or image files it creates in Smart Notebooks. You can learn how to use Jing in less than 5 minutes.
TechSmithCamtasia Studio - by far the best software for this purpose. About $150 for an individual license for educators, but the price goes way down for multiple user licenses (e.g. $99/license for 5-9 licenses all the way down to $40/license for 100-249 licenses and still lower for 250+ licenses). The full version is available as a 30 day free trial. Camtasia Studio 4 has the ability to produce files for the video iPod and upload files automatically to Screencast.com which makes distribution of mathcasts and other screencasts extremely easy.