Gnomie kevaughan writes:

Machinima (muh-sheen-eh-mah) is filmmaking within a real-time, 3D virtual environment, often using 3D video-game technologies.

In an expanded definition, it is the convergence of filmmaking, animation, and game development. Machinima is real-world filmmaking techniques applied within an interactive virtual space where characters and events can be either controlled by humans, scripts or artificial intelligence. By combining the techniques of filmmaking, animation production and the technology of real-time 3D game engines, Machinima makes for a very cost- and time-efficient way to produce films, with a large amount of creative control.

In other words: “filmmaking in a video game.”

1. Use a ’simple’ recording software such as FRAPS because when you need to record you’ll end up recording a few or more takes before you get the perfect ’shot.’ Using complicated software can induce more frustration. If you do use FRAPS, then setting the record button to the “scroll lock” will be help by its LED keyboard light (letting you know if you are toggled in recording or not) and because the button is rendered useless in a video game (unless specified).

2. DO NOT — I can’t stress this enough — DO NOT use “noclip” (where the player has the ability to “fly” through and around anywhere”) to record you shots. Recording from the player’s view means using the mouse will result in shaky and not balanced camera movement in the final results. DO NOT use yourself as the camera.
3. When editing, do not use long scenes as this would “naturally” bring boredom to views. Instead, cut out the “useless” footage; keep the excitement up and the boring down. Short and amazing footage does better than long scenes with only a few important events.
4. If you plan on uploading to YouTube, remember that the best format is to render the final project as a .WMV at a resolution of 640×480 as this is the optimal way to produce crystal clear videos on YouTube.
5. DO NOT use those “cheesy” video transitions; they tend to have an immature or unprofessional feel and look to them.