Screencast-O-Matic is a free web-based application that allows you to record your computer screen and microphone or webcam and then optionally add annotations to the recording (commonly called a “screencast”). Screencast-O-Matic is entirely web-based and runs on Java, which means that as long as you have Java installed on your computer, nothing else needs to be downloaded or installed. The free version lets you create screencasts that are up to 15 minutes in length and download your recordings as MP4, FLV or AVI files (but are watermarked). Screencast-O-Matic does have PRO accounts available to purchase for $12/year which remove the time and branding constraints (as well as giving you optional password protection or video editing tools).
What sets Screencast-O-Matic apart from other screencast tools is its ability to show or highlight your cursor or mouse clicks. Here is an example: http://www.screencast-o-matic.com/watch/cXXIntuQ6. This can be extremely helpful when trying to demonstrate multiple steps associated with a given task. You can optionally record your webcam to go along with the recording as well.
Check it out here: http://www.screencast-o-matic.com/