Want to screen capture the proud moments while playing games on your iPod Touch/iPhone, then this app named ScreenRecorder can help, it can record videos of the screen of iPod Touch/iPhone, which will be saved at location \private\var\mobile\Media\ScreenRecorder. Videos can be deleted from the app itself, if you want to do so. Backup option is also available through iPhoneBrowser or OpenSSH (-Read Tutorial)
WARNING: Developer Elton Bolzanac says that ScreenRecorder can crash if you record more than 45 seconds of video.
You can buy ScreenRecorder for $1.99 on Cydia under BigBoss repo.
Screen capture iPod Touch for newbies