The best way is to use FRAPS, but if you're cheep (like me) than the ingame recorder is good. (a good version of FRAPS costs $37)
First, record a track, edit it's camera angles and what not. Then, go to "Flight-Record AVI" Chose your quality and FPS, resolution and all that stuff. The most important thing is the codec. I use The Xvid MPEG-4 codec. This is fine if you keeping it a stand alone thing, but if it's going to be used in a movie, you need to convert it.
If you do use the Xvid codec, than make sure when you recording the movie, the lock on window is on top, not the recording info window. If the info window is on tip, that corner will be in your film. put the lock on window on top by clicking it.
Find your vid in the movies folder of the lock on folder.
Hope this helps