I'd like hardware/software that can capture my students' thought processes as they solve problems. i.e. I want them to make videos like this. (Except, my students would be studying, not teaching.) Then, I could figure out exactly where they're struggling, they could watch each other solve problems, etc.

What is the best way to do that?

There are wacom tablets, but the best ones are expensive and the cheap ones are very difficult to write neatly with. In addition to that, both programs would require Camtasia for screen capture. Camcorders could capture pen on paper, but all but the most expensive camcorders lack close-up focusing capability.

Is there an easy and affordable way to do this?