Assuming a simple product demo e.g. the one found on http://www.sublimetext.com/
i.e. something this isn't traditional high res video and could be reasonable accomplished with:
The question is, which performs better for the user? Both in terms of:
If you feel that there's a superior technology to accomplish this or another metric to judge its usefulness, let me know and I'll adjust accordingly.
I know it's already answered, but as you specifically referred to the Sublime Text animation I assume you're wanting to create something similar?
If that's the case then here is a post explaining how it was created by the Sublime Text author, himself:
The interesting part of the article is how he reduces the file size - which I believe is your question.
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