Step 2: Record the Video
To record your app video, you can use the iPhone Simulator tool on your Mac. Simply load your app's code into the simulator, and the simulator will operate your app as if the app were loaded on an iPhone or iPad. The simulator can be started and stopped at key points within your app.
You'll need to use a screen-capture product to record the app in operation on the iPhone Simulator. As one possible option, Ambrosia Software's Snapz Pro X does a good job. The product is only $69 and can be downloaded from the Ambrosia website (which also provides a free trial of the app). Many other screen-capture tools are available, and you may already have a tool that you like to use with the iPhone Simulator instead.
Keep in mind that potential buyers equate the quality of your video to the quality of your app. People who see a cheesy homemade-looking video will assume that your app is about the same level of quality.