Seems to be fixed in KDE 4.1.
In the latest Intrepid as of now, after you click New Snapshot the delay
countdown begins. Once the countdown has ended it will display a fullscreen
screen capture for you to select a region from.
** Changed in: kdegraphics (Ubuntu)
Status: New => Fix Released
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ksnapshot - region setting does not work with delay set
https://bugs.launchpad.net/bugs/247548
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