ZoomIt from Sysinternals

ZoomIt is screen zoom and annotation tool for technical presentations that include application demonstrations. ZoomIt runs unobtrusively in the tray and activates with customizable hotkeys to zoom in on an area of the screen, move around while zoomed, and draw on the zoomed image.

If you are not familiar with the tools from SysInternals then you should look around a bit as he creates some of the top system tools around (and they are all free).

Link:
http://www.sysinternals.com/Utilities/zoomit.html