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No, it isn't based on your description. OmniDazzle is a tool for real-time animation of your cursor movement (e.g. to make it visible on screen or to write and draw on the screen while it is still in use, i.e. it is not a screengrab). There are plenty of alternative tools you could use for this purpose. Screen shots are very easy to take on a Mac (search for keyboard shortcuts in the Mac help) and paste into any graphics app. E.g. OmniGraffle could be used for what you want as could e.g. Pixelmator. However, for ease of use and posting to server space, I would recommend ImageWell. It used to be freeware, but is now shareware. However, it does pretty much everything you ask for.