The first thing to take into consideration is the playback speed, I would suggest between 10 and 15 frames per second.
Ok the next step would be to select where you want your video file to be created, this is done through the file menu and 'Create capture file', if you don't do this the default file will be used this is located at c:\capture.avi.
Now comes the fun part, get some play doh or plasterscene and mold a figure, like a dog or person whatever you like. Position your webcam so that your model is in view.
Now if you want the last image taken to remain in the video window turn off preview by clicking the preview on/off button.
Now the basic idea is that you make a small change to your model like a leg lifting to walk the hit capture frame to add that frame to the video file. Then repeat making small movments of your model each time recording the frame, yes it can be time consuming but the results are cool.
When you are done with your animation hot Stop to save the file. A Nice touch after would be to dub some audio over the file using a video editing package. I am working on an audio dubbing program but I am not happy with it yet so it will be a little while.
The only other features you might want to consider changing are the size of you video, this is done through the Video Format button. And of course there is the compression which is done through the Compression button.