Forgive me, I’m somewhat of a noob, I’ve found everything I needed until now… Is it possible to record game engine output to an avi file? I haven’t messed around with the engine much, but so far I can’t see any way of doing this…
How about using the “Game Physics to IPO” function and then making an AVI from the results using the render engine?
You could use a program like window medie encoder http://www.microsoft.com/windows/windowsmedia/9series/encoder/default.aspx its free to download if you W2k or XP it can record anything your doing on the computer.
Search for: Fraps.
In the gaming world a lot of people want to record gameplay, share this with clans or even make game movies like we all know about WoW movies.
Search for Fraps, it records OPenGL applications, if even records Blender itself, except it’s menu’s which aren’t truelly OpenGL, but for the 3d window it works as well for normal 3D games.
The version you can download from teh Fraps website has a limited time, you can only record movies that are shorter then 30seconds, but if you find the need to record more and without the Fraps logo on top. PM me.
Btw I thought Fraps is only for windows, but if you need a program to record it for another os, just google for In game recorders. 
if your PC can’t keep up with FRAP, (the recorded video is jumpy?), try to insert a small python script into your game so that every frame it captures an image file and save it to the HDD. the good thing about this approach is that you’ll never miss a frame. it’s consistant. sorry i am too lazy to find that python script.
in order for this method to work well, enable “all frames” under the game menu.
Wanting to record 3D game engine frame by frame for user controlled animations.
another question in the topic:
is it possible to run a rendred animation in the game engine?