Hi!
I stumbled my way through this process for a while, and wrote up a step-by-step tutorial that should help other budget-minded devs create good-looking trailers with iShowU HD. You can check my trailer for a quality reference (I uploaded in 720x480, so watch in 480p for best quality). Here it is:
http://www.goodhustle.com/blog/2010/10/how-to-create-a-unity-iphone-trailer-video-on-a-budget/
Basically, I cover a couple of setup tips (like maximize on play) and discuss how to set up your capture and output settings, and then upload to Youtube for decent quality recordings with color correction.
Most of the posts I’d found on the forums were heavy on the software recommendations but pretty light on the how-to, so I hope this fills a need somewhere out there!