Comment 20 for bug 305286

Most likely the problem lies here:

r18986 | conrad | 2009-05-29 14:43:22 -0700 (Fri, 29 May 2009) | 1 line
Support block-level quantization in Theora

Lucid has apparently updated the Theora encoder library without updating the decoder to support the new features, resulting in obvious problems.

Of course, another obvious solution is to just use a better screen capture program, as described in http://verb3k.wordpress.com/2010/01/26/how-to-do-proper-screencasts-on-linux/ .