Take the Text Caption shown below for example. The arrow in the upper left of the caption is known as a callout.
You can control a few attributes of the callout (you can use the Properties Inspector to select from a list of pre-determined positions and you can elect not to show the callout). But if you want to fully adjust the callout (perhaps move it a bit to the left or right, or make the callout a bit longer), you're out of luck.
Many Captivate developers, tired of the limitations of standard Text Captions, have forsaken Text Captions altogether for Smart Shapes. In the image below, I'm using a Rectangle Smart Shape. The shape looks much like a Standard Text Caption. I can control its appearance via Object Styles. However, check out how I am able to drag the shape's callout by dragging the yellow square. You can't do that with a Text Caption.
Because Text Captions are really bitmap images, I'm not able to fully control how the captions look unless I edit the bitmaps using an image editing program. With Smart Shapes, you can control just about every aspect of the way the shape looks by combining options found on the Properties Inspector with Object Styles.
While there is much to love about Smart Shapes, a perceived downside to Smart Shapes is that you can't use them to automatically get captions when recording a Software Simulation. You'll be happy to learn that you can, in fact, use Smart Shapes instead of Text Captions during the recording process.
Display Captivate's Preferences (Windows users, choose Edit > Preferences; Mac users, choose Adobe Captivate > Preferences). Choose a recording mode and, from the Captions area, select Use Smart Shapes instead of Captions.