I had a poor man's version of this with TimeSnapper Classic, a free Windows utility that takes a screenshot every n seconds then lets you view a timelapse at the end of the day to show how you spent your time.
After a few weeks my disk was starting to fill up with screenshots. I browsed the folders and noticed that most of the screenshots looked almost identical. "I should come up with some kind of image codec optimized for image sequences, that diffs against the previous image to save space." Then realized I had basically reinvented GIF / video codec haha. So I wrote a script to shove the timestamp (filename) into the image itself (with ImageMagick), and convert them to video with ffmpeg. 99.9% size reduction!
This looks a lot more useful though.