Camstudio is what you use to cap.
1. Download/Install Camstudio
2. Go to Region and set it to Width = 384 Height 288. This is about the same size as the new MSN cam window.
3. Go to Options > Video Options and select XVID and configure at about 1000 kbs
4. Select "Do not record audio" under options. If you have it set to record audio, it will most likely fuck up when the program is syncing up audio/video and you'll lose your cap.
5. Record to your heart's content. Do a few test runs first by capping the desktop and waving the mouse pointer around or whatever just to get a feel for the program.