I've tried many free image capture alternatives and I still come back to SnagIt as my ultimate screen capture solution. WinSnap is the latest in a long series of apps that has some of the features I love, but lacks a key ingredient here and there to really save me time. WinSnap does a great job with still image capture of everything from standard square windows, to the more unconventional skinned windows common to media player apps. Support for drop shadowing, watermarking, color alteration and background customization make WinSnap a useful solution for making screen captures look pretty. I'd like to see a few more editing options built in, because it's still easier to edit and output a screen capture in the same app, rather than launching an external editor to finish the job. Output formats include JPG, PNG, GIF, TIF and BMP.
You'll also need a solution for recording movies of your desktop, like CamStudio, in addition to WinSnap. [Windows 2k/XP $0.00]