Frankie showed us a game film they'd made in a map for Halo 3 called "Sandtrap". It's the biggest level they've ever created, and as you can imagine, it's heavy on vehicle use. It was a four on four match, and sure enough everyone jumped into one of the vehicles at the spawnpoint, and they all raced off towards each other and there were several deaths pretty soon into the gameplay.
Using the free cam mode to fly around, he found a particularly spectacular kill, and checked it out from several angles, reversed, paused and fast-forwarded it via a timeline on the screen, and even zoomed in and out showing us how you can use the free cam, or you can lock on to any player you chose. He did that throughout the rest of the match, and it even revealed details like where Player X was hiding when he fragged Player Y. It's a pretty robust way to check out a match after the smoke clears, and the films don't take up much space on your HDD. The film he showed us from Sandtrap was fairly long, had eight players in it, and was only "4 or 6 megabytes."
There are some limitations, mainly the fact that you can only view saved films from within the actual game engine (like with Burnout), and you can't actually edit the films, other than saving short clips. It'd be cool if this linked up to say, a Halo 3 channel in YouTube, allowing users on the web to watch spectacular kills and such. However, it's bound to be a tool that machinima directors will love to use, and it's a nice addition that adds a lot of replay value to the match you just played, and the game as well.