Once you figure out the content, length, tone, and medium of your video, then move on to storyboarding. Storyboarding is an important step in creative processes such as these because it is much easier to visualize the end product before putting any real technical effort in. Filmmakers don't just storyboard as a way to outline their plot, they use it to do early edits to the film before wasting any time shooting stuff that will never make it past the cutting room.
"The more detail in your storyboards, the easier the editing stage will be," writes Stu Green, author of the post on Webdesigner Depot. "Your storyboard will help you stay organized throughout the whole process, and if you ever get lost while producing the video, the storyboard will get you back on track."
If you plan on doing a straight screen-capture demo, don't just wing it; make sure you script out what you're going to say as you demo the site. Additionally, spend a few extra bucks on a nice microphone to record your voice - quality audio goes a long way in video production.
There is a healthy list of options for software to record you screen-capture videos with, including Screenium, Jing, CamStudio, iShowU and Captivate. One nice option that I find is overlooked these days is the screen capture abilities included with the standard version of Quicktime on Mac OS X Snow Leopard. For a low budget product, Quicktime can get the job done, but if you wan't something a little more pro looking, one of the aforementioned applications will help also.
Videos such as these can go a long way in helping to rope in new visitors to your site. These can also be useful for an early stage company looking for a quick and unique way to explain their concept to potential investors. However, if your looking for something much more profesional have us work on your next explainer video at www.ExplanatoryVideos.com