As long as you're not charging money for them (who would pay?

)
AFAIK those are ok. Alot of people did them for UT and Quake, seen some lately for Bf1942 and such too.
Unless the game can save demos in a usable format (most don't) people I know that have done them have just played with TV out going to a VCR, then captured the VCR footage back to the PC with a capture card and encoded them to DivX.