Annotations are pretty much any type of callout or screen effect which can be used in Camtasia. There are a variety of different annotations available, so see below the image for more information.
Adding an annotation is as simple as dragging it onto your timeline.
Once the annotation is on your timeline, you can move it and change its shape
To change the colors, font, borders, or other aspects of your annotation's appearance, you can click on the "Properties" button to the right of the canvas.
Transitions can also be added to annotations, allowing them to appear and disappear gradually.
Note that this annotation only has a transition at the beginning. Unless a transition is added, it will disappear instantly.
Callouts can be used in a variety of ways.
I often use them as title cards, which just involves creating a callout that covers the entire screen:
You can also use it to just add text to one portion of the screen:
You can also use callouts to draw the eye to certain parts of the screen, as with this one showing the links a the top of the library page:
Blur and highlight allow you to do just that. You can blur out specific sections on the screen, as I've done here to obscure personal details:
It can be also be used to blur out the entire screen but one section:
Of course, the highlight function does a bit more to draw the eye:
Sketch motions allow you to add animated sketches to your screen. These can be nice to add a personal touch, but they are limited in variety.
Historically, I've used mostly arrows, but this smiley face is *kind* of fun: