Hello,
Sorry for your frustration. Snapz will freeze your screen as soon as it is invoked, though audio will continue. This is normal behavior. Try this:
1. Load up the movie you want to record and pause it. If there are no pause controls available, try control-clicking the movie and look for a pause option.
2. Invoke Snapz and set up your movie parameters.
3. Get your fingers ready! Start the recording in Snapz and then quickly start the movie you paused.
4. You may have to trim some of the beginning of the movie. Using QuickTime Pro ($30 if you don't have it already) is a great choice, very easy to use.
Hope this helps