In case anybody else is having similar problems I'd like to report that (much to my surprise) I did manage to find a solution.
I'd installed the Canon EOS Webcam Utility on my machine to allow me to use my Canon SLR camera as a high-quality webcam.
After working out how to successfully uninstall the utility I am now able to again use the Video Demo feature in Captivate.
What prompted me to go down this path was a post by somebody who had the same issue with a Logitech Webcam utility.
The most annoying thing about Captivate crashing when this happens is the total lack of user guidance about what caused the crash.
Maybe an "Incompatible webcam software detected, please uninstall to continue using Video Demos" message would help.
I also found that it made absolutely no difference, with this issue, whether Captivate was being run in Administrator Mode or not.