Home-Project Video Editing Software

I need advice regarding video editing software.

I have this two-part project. I have to capture and edit a PowerPoint presentation with audio.

As part of the same project, I have to screen-capture myself playing chess on-line (I know, how thrilling), add audio and edit it. I have all the audio stuff, and was thinking of using SnagIt for the screen capture, but would appreciate advice on the video edit software.

My buddies are all telling me to use Camtasia, but I don’t want to spend that much for one project if possible. Do viable alternatives exist that are user-friendly and can navigate MPEG-2 as well as MPEG-4?

Now as I type I’m not sure if SnagIt can create anything other than MPEG-2 and I need to be able to create mp4. Question #2: any screen capture software suggestions?