I have 2 identical installs of openSUSE 11.4 _64, one of KDE4 and the other Gnome2
In KDE the adjustable screen section/frame in greyed not red and cannot be adjusted.
See image: http://paste.opensuse.org/93264603
You can use the selector tool from the UI toolbar, but once you start recording you loose UI control and to stop recording you have to choose close to terminate.
Starting xvidcap from the terminal gives no errors.
Package is by Packman