A video demonstration will be in the form of a "screencast" which is simply a digital recording of your screen, also known as a video screen capture or a screen recording.
With this method, your tutorial would consist of you narrating and demonstrating what you are teaching your students. If you are using SnagIt, you would need to adjust the recording area to encompass your browser window, click record, and begin your demonstration.
Here's an example of a screencast tutorial:
Using this approach, you'll be recording a powerpoint presentation. This might be ideal if you normally take the time to start your IL session with an introductory presentation before launching into demonstrations.
This approach is really just a combination of the first two methods, it just takes a little bit of editing/cutting using the tools that SnagIt offers you after you complete a recording. You wuld just cut out the parts where you transition from the presentation to the demonstration.
For this method, you might want to first walk students through a presentation, this could be where you explain important terms and/or setting up the context of the video. Personally, I use this to "set the stage" for the demonstration that would follow.
This method is fine if your video is concise....but you should consider whether or not to breakup your presentation/demonstration into a series of individual tutorials. Video #1 could be your presentation, Video #2 could be your demonstration. Breaking them up like this has been found to be a best practice and more effective.