Oh boy, it's not often I get to talk about LPs outside of Something Awful.
Ordinarily I'd say that the best way to handle DF would be a screenshot LP (see, for example,
any of the entries here), but finding a good image host can be tricky, between upload limits, bandwidth limits, and replacing your images if they go a while without being viewed.
So that leaves us with video. Which means we have to figure out how to keep a video of the notoriously-slow Dwarf Fortress entertaining.
The golden rule here is: If in doubt, cut it out. Long stretch of designating bedrooms? Cut. Game chugging along at 5 FPS while your cistern fills? Cut. Trade caravans, noble appointments, and the usual day-to-day running of the fort? Cut, cut, and cut. Wereiguana shows up out of nowhere and starts chewing on your legendary brewer? That can probably be kept in. Unless it's happened before.
Speaking of cutting, that's where
Avisynth comes in, along with its good friend
AvsPmod. Avisynth is tricky to learn, but it's free and worth the time investment.
Finally, since you'll be editing the video to HFS and back anyway, you might as well just re-dub the music on top in a nice, unbroken loop, and do your commentary after your editing, and dub that in for the final render.
Yes, it's a lot of work. Yes, this will take time. But this is applicable to any game you'd want to LP.
Oh, and one last thing. There is no reason, ever, for a facecam, and that goes triple for a game like this. Focus on the gameplay, chop it down to just the exciting bits, and set the foundation for a good-quality Let's Play.
/goon