So fraps still isn't working, but I noticed that in game in developer mode F9 is used to record and F10 is used to stop recording, however it saves the recording as a .dat file. Is it actually recording video, and if so can this recording be played back?
No, it's a demo, like in ID Tech based engines. It's the same way that COD and Halo have theater modes, and oldschool Battlefield had Battlerecorder.
You'd need to find a way to play it back, and then record it via something like Fraps.
You can play it back in-game, but the results are likely to be different, because of timing and random factors.
I did some tests last year with laser dodging, didn't work as expected...
The feature was only intended for use by the developers in authoring short sequences of actions in cutscenes, so it's really not the same thing as the game recording feature seen in other games, including Bungie's.
byproducts are fine, but where's the beef?