Indeed very cool. Usabilla offers a same form of feedback: http://usabilla.com/products#usabilla_live (see also button on the right side of the page).

How it works:

1. You create a widget and add two lines of code to your site. 2. Visitors click the feedback button and can select highlight any part of the page to comment on. 3. Usabilla creates a screenshot (server-side) and shows feedback in a simple dashboard.

Disclaimer: I'm founder of Usabilla.

How do you guys take a screenshot server-side for sites that require a login? Or does this only work for publicly accessible pages?

Capturing sites that require a login works the same as other pages. We use the HTML output to capture a server-side screenshot.