Display Recorder if you are jailbroken. If not the Reflector App. Reflector App is not on App store but has to be downloaded and installed on your computer to mirror then it can record (but not on Windows versions later than 7). They have a trial version that lets you mirror for 10 minutes or less without paying.
Can I just ask why screen recording apps aren't allowed on the App Store? I don't see why apple doesn't want it, what's the issue?
You guys should check out Sanuku's thread on gameplay videos, it's one of the more intelligent explanations about Apple's policy on video capture and his elusiveness on method. Some other threads similar to this one are here, here, and here. I'm not sure but if I recall correctly Display Recorder was very briefly avaliable on App Store so I imagine Apple has not always outright objected to them.
It's received one review which was 1 star, says all it does is the same as your ordinary camera, doesn't record the screen
Thanks, I am editing that post to remove fraud app reference. It's a shame to see that sort of rip off posted on App Store.