Open Source Greenshot does screenshots and annotations
Since Brad's post, the author has responded to calls for the creation of an installer though Greenshot is still less than a half-megabyte download. The three key capture types are supported - region, window, full desktop, though there is no handling for scrolling regions like length web pages. For repeated captures of the same area, the last region tool is very handy. Images can be copied to the clipboard, sent directly to your printer, and saved automatically with your defaults or with settings chosen from a dialog box.
Common screenshot-related tools are included in the editor. Use them to draw circles, lines, and boxes, or add arrows and text. All objects can be resized and edited, including text. I'd like to see the developers add a few more tools, like the ability crop and resize images, but it's still a very handy editor as-is.
Greenshot is Open Source and runs on all varieties of Windows. There's also a portable version (which weighs in at only 160k) available for on-the-go screenshots from your USB flash drive.