We typically use Tact-Tiles and DnD plastic minis or Reaver metal minis. If we don't have a particular monster, we draw the monster base location on the tile and lable it (Giant, Dragon, Orc, etc.). Also helps in multiple opponent encounters, you can write the opponent # next to each mini to help keep up with individual bad guys (Example: Orc #7 of 15, write a 7 next to the appropriate mini).
IMHO Dry-erase is the answer when you want to DRAW the battlefield.
I do like the video option, though it is more time consuming to work the programming than make a simple drawing on Tact-Tiles. Video also requires a lot of expensive hardware. You can improvise easier with Tact-Tiles than with video. But the overall video effect is much more visually detailed (every little bush, tree, blade of grass) than hand drawings which DOES increase the player immersion into the game. It's a trade off, most of the time we use Tact-Tiles due to time contraints, rarely we use the video/projecter option (when we have the time and want more special effects in the game).
- Brottor