Well, video capture is something WinEQ (and WinEQ 2, and Inner Space) does, not EQPlayNice, but that's ok

Video capture is not something that SOE bans people for because it has literally nothing to do with the game, and in fact they would have no clue if you were capturing video. What they are looking for is stuff that alters game mechanics and such. For example, warping from one place to another or giving yourself other abilities that you arent supposed to have according to the rule set of the game. EQPlayNice has been looked at by SOE in the past and they said that it's not something they're going to look out for (ref:
http://forums.gucomics.com/viewtopic.php?p=61723#61723 ). WinEQ and WinEQ 2 are essentially in the same boat as EQWindows, which SOE has banned for many years ago before windowing was available in the game itself, but they reversed each EQWindows ban and have not banned anyone for that since (ref:
http://eq.stratics.com/content/news/arc ... 7159,31708, -- the link to the SOE dev notes are long gone since it's from december 2002).
I will tell you, WinEQ's video capture is designed to be efficient and easy to use, in order for the average user to be able to produce video captures. This is in contrast to FRAPS, which you can look at also. FRAPS is more difficult to use and stores the video in its own codec which would be required in order to view the movie, and must be separately encoded to another format to share it (or you end up with a huge file). WinEQ's process is slightly outdated compared to Inner Space, which allows you to encode the movies later. WinEQ forces the encoding immediately. WinEQ and Inner Space both encode to Windows Media format.