I have been trying to create screencasts using RecordMyDesktop on Ubuntu. While the app itself functioned well I had a serious problem with the image quality: switching windows seemed to lead to massive diagonal pixelation of the captured images rendering the screencast useless.
I played around for a while with various RecordMyDesktop settings (frame rate, full capture etc) but to no avail. Some searching on the web brought me to this forum post which appeared to describe an exactly similar problem – the screenshot in the original question was almost identical in pixellation effect to what I was seeing. (Aside: interestingly the user says there problem arose after they installed compiz so that may be part of the cause …)
While the forum did not have a resolution for RecordMyDesktop it did provide a working ffmpeg command line command that worked perfectly:
ffmpeg -f alsa -itsoffset 00:00:02.000 -ac 2 -i hw:0,0 -f x11grab -s $(xwininfo -root | grep 'geometry' | awk '{print $2;}') -r 15 -i :0.0 -sameq -f avi -s wvga -y screencast.avi