One copies a copy of your entire desktop to the clipboard, the other copies just the window you are working in. Can\'t remember which is which right now though.
Just paste into whatever you want them in, In photoshop, if you select new it will automatically generate a canvas that\'s the right size for your clipboard.
That\'s odd, it\'s worked on every Windows machine I have used, from at least 95 onwards.
I use it constantly at work, as it lets me grab screen captures of the customers broadcast system. This comes in real handy when they accuse us of shipping the wrong parts and go edit their broadcast. It\'s nice to be able to go \"Look here is what your system looked like when we picked the parts\".
For capturing video I use Xfire, it\'s a chat program like ICQ or Messenger but built specifically for gaming. It has built in voice chat, tells you things like what games your firends are playing, allows for IM in the middle of supported games (which are most of them) and also has support for both screen and video capture.
http://www.xfire.com/
If you do use it, you can find me under Gilvanblight