Midori is right. Screen recording is not and was never meant to be done on the iOS itself. Any application from an outside source (Cydia, DisplayRecorder, or whatever you people with jailbroken devices use) was never meant to run on the processor in the iOS, and therefore can cause numerous problems. An outside (wired) recorder would be a much better alternative, but the issue that still exists is the latency from real-time recording. You will end up with choppy video and gameplay while recording. Its pretty much bound to happen any way you look at it.
Dear PC users excited about the idea of downloading CamStudio, Fraps, etc... My computer has a built-in screen recorder with full screen, fixed window and mouse movement modes. Be jealous. ;]