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i use jing it has a load of features and is free
TechSmith | Jing, instant screenshots and screencasts, home
I use Jing too. What is nice about it is that you can program it to a function key.
But there is also Fast Stone Capture with similar facilities. This is the last free version: A+ Freeware - Multimedia & Design - FastStone Capture 5.3 (last freeware version)
Both have arrows, text boxes, highlighting and frames.
I agree whs the function key makes all the difference to me, it means you can capture the start menu and context menus without them disappearing before you can capture them.
i use alt and j as my hotkeys
Thanks friends! +rep added!