To aid their development of Windows 7 beta versions, the Microsoft engineers built in a diagnostic tool called Problem Steps Recorder that combines screen captures with mouse tracking to record your actions. You can launch this program from the Start Menu by typing psr.exe in the search field. Hit the Record button and the applet tracks your mouse and keyboard input while taking screen shots that correspond with each new action. When you stop recording, your session is saved to an HTML slide show recreating your steps. You can add comments and annotations.
This tool is instantly useful if you need to create a tutorial, for example, to provide instruction for anyone on how to run an application.