Let me explain how this video was created in Captivate 7.
I first recorded a video with narration of a software app and then added text callouts and smart images (about 4 minutes). Everything in the video looks and plays back fine, either in Captivate (as a .cpvc file) or as a published .SWF file. I then created a new Captivate project (cptx file), added some slides, and then added this video as its own slide. At this point, there seems to be some degredation of the text and screen image when vewing it in the project.looks good there too.