OK. Just gave it a try and it seemed to work fine.
Only records in 4:3 format by the look of it. My skybox is set to widescreen so I dunno if fiddling about with a few options might get rid of the side borders?
My firmware is a tad out of date as well ....

.... I'm running 1.73e, current version (non-beta) available I think might be 1.85?
Here's a sample vid, recorded at highest quality it can manage. Quality is OK, nothing fantastic. The Archos players are much more geared up to record than the A2. Wasn't a feature I was fussed for though so no biggie for me.
Sample vid.
(Save as rather than run is probably a better bet. Format is nasty ASF as thats what the A2 uses.)