Why do we need a rooted phone to capture screenshots on older versions of Android? I realize in order to capture screenshots of my phone, all screenshot applications require I have a rooted phone. Why is this so? Why can't we have a simple screenshot application for Android, just like we have for Windows?
The answer is rather simple, it's a permissions issue.

Android uses what is called a framebuffer for the video display. The framebuffer is located at /dev/graphics/fb0. this "file", which is basically a stream that the device writes to when changes in the user interface occur, contains ~2 frames of the screen display. 

The permissions on the framebuffer file is rw- rw- ---. Note that the last "group" has 3 "-"'s. That basically means that if you are not the owner (which is root) you do not have permission to even read from that file.

If there was a system installed application, that could take screenshots, it would have permission to read from the framebuffer. Which, I believe, is how the Motorola Xoom is able to take screenshots. It has an application installed on the device, as a system app.

Reading the framebuffer, for a developer, is actually simple, if they have access to read it.