This bug is resolved with the new audio routing code.
The existing audio routing code is fundamentally flawed - it's all in the kernel, doesn't get any feedback from userland. New audio routing code fixes this underlying problem, and I've tested video record with said new code, and it works great.
See
[TESTING] New audio routing for Froyo for more details. Unfortunately that is not the most updated code, but it's better than what's in the build.