a couple things

I use a camera, but you can always get a video capture device. I looked into getting one and depending on how good a quality of one you want you can spend anywhere from about $30 to well over $200. If you want to do video along with pictures I would suggest a capture device. While I have taken video with my camera and my phone, it's a real hassle and the quality isn't very good.

I had read on-line about hooking up the 360 through your PC and taking pictures that way, but at the time my laptop wouldn't do it and right now I have a net-book that barely handles pictures when I get to many.

There are different ways to get your pictures. You can have amazing pictures if you take the time and learn how to get good pictures with your set-up.

I use some of my pictures as screen savers on both my pc and phone. It's very nice when people comment on the pictures.

* right at the moment I am trying to think of another subject to write on and doing re-writes of the ones I already posted.

Controls

This is a good one to skip if you know all the controls already. I'm writing this as if  for someone who has no idea which controls do what for picture taking purposes.

For Portraits:
  Right stick is the most important
  -up and down, left and right. This adjusts your angle that the face is in the "frame".
  -Clicking the right stick puts you in 1st and 3rd person.
 Left stick
  - Moving the left stick will move the character closer or farther away from the object that you are using to        put the character "in frame". You should only move left stick when behind the character so you can see          how far or close you want to be.
  - Clicking the left stick will put you in sneak mode and while you can take a pic that way, it tends to distort        the face.
 D-pad
 - This pauses the action.
     * it's not really needed IF you are inside an Inn or your home, but outdoors I would use it as other wise           you could get attacked while you are trying to get your phone/camera ready.
     * it also gives you a clear picture of what your character is going to look like. ( my lighting never changes         using the D-pad).
     * Not only is it giving you a clear look at what your character will look like, but you can make sure that             there eyes are not closed or partly closed. Have them looking in exactly the direction you want.
Main Menu key
 - Using this ( already paused with D-pad or by itself) will allow you to remove the HUD and cursor, also         change lighting if you need to.

Action shots
 X or Trigger ( either )
  - draws your weapon or spells.
     * which automatically puts the "camera" behind the PC
 Right Stick
 - left, right, up, down changes the angle the character is looking
 - Click and hold to move the "camera" to the position you want
   * if you let go it will either put you back in first person or behind the character.
   * get the angle you want before clicking down on the right stick as it's very very hard to change that.
 Left stick
  -left and right will swing the camera around ( and go in and out towards pc)
  - up and down will give you the chance to decide how far away you want your character to look
  - clicking the left stick will put you in sneak mode
 D-pad
  - will pause and allow you to either take the picture or just get ready. ( also change outfits IF you have them      in favorites.
 Main menu
  - will allow you to remove the HUD and change lighting
Kill-cams
 - I have never been able to do more than use any menu to pause and change gear if wanted.

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 I did not use the "B" or inventory menu on any of this, the reason is while it IS usable, I don't mainly because you can't take a picture when using it ( when paused),  it changes the light and makes everything look a bit blurred. The light change is not much and it isn't that blurry, I just don't like doing it. But otherwise you can change D-pad to "B" key  ( or inventory menu key).