I think it will record what ever you want it to record, desktop, games, applications. What software are you using for Webcast's? But honestly, as long as your record key is not binded in the other software you use, it should work.
OK so its using Media Player. one way to test it, is to get a movie, LFS movie, any movie that plays within Media Player, and then use Fraps to try and record it, see what comes out.
I'm fairly sure Fraps only works with DX based applications, as I *think* all it does it add a hook to the Direct3D dll's, and then grab the framebuffer in raw format.
Since WMP, winamp, etc. are DirectShow based (iirc), I'm pretty sure fraps wont pick it up - although I'd love someone to tell me I'm wrong and they've changed it since I last used it (v1.9D)