I was just wondering the same thing. I suppose you could record the simulator but that doesn't work for multitouch games.
Sanuku is being shady with his way of recording off the iPad 2. Just saying. I think he hooks it up with a program through his computer though but won't tell us which. Here's a link for iPads: http://macmost.com/ipad-video-screen-capture.html
I think iPad 2 allows to output to the TV by the HDMI dongle. I know some people have used that with non jailbroken iPads.
Display Recorder (Doesn't record sound, though you could use another idevice and record the sound as a voice memo, then edit the display recorder video to have the audio synced up properly. Or hook your HDMI to 30-pin dongle to your COmputer somehow and then use a screen recorder for your computer.
I use Sound Stage to record gameplay video. It does a pretty good job and it's quick and easy to use. It's like $4.99 in the Mac App Store. It doesn't do a great job of recording sound though, so I just add the sound in when I'm editing the video in another program.
If you have a spare PC and a bit of money, this might work for you: http://www.youtube.com/watch?v=Vho_GVXd5xs
It may be a convoluted way of doing it but you could always set a function to be called in line with the Display Linker, or with the update code to take a screenshot of the game, save it to the device's internal filesystem, then export them, stitch them together and set at the same FPS as the game, it might work, might not, always an idea
Rather than do the sound manually, why not just connect a 3.5mm male to male cable from the headphone jack to a microphone-in on a computer and record the audio on the PC. Should give you fine quality for a trailer.