Well, for anyone who cares, I found exactly what I was looking for and it's freeware.
LiveZoom for Windows Vista
It's called LiveZoom for Windows Vista. You can press Ctrl + ~ to toggle zooming. When zoom is turned on, you can use your mouse wheel to zoom into the screen and it follows your mouse cursor. It's not just a static shot, the zoomed image has live updates so you can watch videos or flash animations zoomed in. Pretty cool.