Well, I appear to have answered my own questions.
So, if you're reading this post, and are experiencing the same problems I was, cut your videos down in a proper video editing program (not the internal tool) to 240x180, FLV 30fps. Have one video for each slide sidebar, then set your slide transitions to the length of your video. First video segment is 15 seconds? Advance slide automatically after 15 seconds. There will be a little dip to black between slides/video cuts but it's not substantial.
Well, now that you have gone through all that pain and effort, you may want to consider looking at Captivate. Captivate gives you the ability to take a video and spread it across a presentation and it does a great job of capturing a product demonstration as well.
I do like Presenter, don't get me wrong, but it is a simple tool for creating quick and easy presentations.
This is a client-directed request. They are looking into several companies to host their webcasts and one of those companies suggested using Presenter. After I review it, if it works with what they want, I will suggest Captivate to my client, perhaps that web hosting company does accept those kind of files but didn't offer up that information.
Also, it's not really a product demonstration in the traditional sense, they have created a bunch of PowerPoint files and wanted the ability to cue their slide changes to their pre-recorded videos. They don't do software so it's not like they can just do a live screen recording such as the one I watched a couple of weeks ago from BorisFX. Of course the other downside to all of this is that only one presenter worked from a script, so this morning I have been researching how to transcribe video since the client doesn't have a robust budget. No matter what program is used, a script is going to have to be generated so that the cues can be set.