Has anyone used
Fraps to record and replay games? Reinventing video capture seems like a waste of the devs time to me. There's much bigger issues to tackle, improving match-making, working through bugs with 1.2, hardening security against exploits and trivial game state/desync errors.
Video capturing is far, far away from the fidelity you'll get from watching a replay. Provided the replay system is properly done, a replay can contain:
1) the perspectives of any player, at any angle you choose on top of an overall observer perspective, all switchable in real time as you watch the replay
2) item builds of each player
3) play back speed control
A video play back is the poorer alternative. On a more intangible level, replays of exciting game play can help promote the game, generate exposure and thus can encourage the community to grow. This means more sales and more funding and incentive for GPG/SD to continue to improve the game for all.