No, you're right. In V8 and I think V9 there was a demo recording option.
Starting with Vanilla blockland all the way up to around V8, there was a option to record .avi (not completely sure of the formatting). Badspot's other game, Age of Time, still has this option, so you can try it there if you'd like. However, the option is completely useless with programs like FRAPS, or my favorite, Bandicam, that not only record Blockland, but whatever other program you like.