Hi Nora,
If the video shows OK when the Hot Potatoes quiz in viewed outside of Moodle, then I think all you need to do is convert the relative URLs used to specify the Camtasia exe file (and any other related files) to absolte URLs.
If you can't view the video when the Hot Potatoes quiz in viewed outside of Moodle, then I suggest you ask for help on the Hot Potatoes Users forum at Yahoo, because I have seen a lot of posts over there from people who are very experienced in using video in Hot Potatoes quizzes.
regards
Gordon
Hotpot (plugin)
Camtasia videos in hot potato
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