Thanks man. That's great feedback. Perhaps I could play around with the sizing of the video a bit. I try to keep it out of the way of the code so that it doesn't overlap too bad.
My straw polls (or "market research" if I ever needed to big it up ;-)) showed a general dislike (though not strongly) for live video throughout a screencast but including portions was OK. That said, everything Gregg Pollack does seems to have him in it the whole time, and he's doing OK ;-)
I avoid it mostly because it adds overhead to the file size. You can crunch down a screen / presentation only screencast to pretty incredible sizes with H264 but as soon as you mix in live video, you either need to sacrifice its quality severely or put up with large files.
I've found the same thing. Solid colors of a screen capture can easily compress to under 200 MB for 60 minutes of video, but live action (even with only small movements) can double or triple that in size.
Yep, I've known about the file size issue when including live video, but it's something that I'm willing to continue experimenting with. One of my main reasons for including live video in my own screencasts is because I myself enjoy watching ones that have it. So, I guess you could say I'm doing it because it's something I enjoy. I'm hoping others will like it as well. :)