The toolbar at the top of the application gives access to global functionality and displays time and battery charge level in the center.
The record function starts and stops a recording of the master output to a H.264 encoded video file. From there recordings can be added to the current set via the Media Browser.
Depending on the recording settings the file will be saved to the device's camera roll and/or the application's documents folder, from where it is also accessible from a PC using iTunes File Sharing.
The external display button appears greyed out and is disabled as long as no external screen is found.
Once you connect an external display (using either Apple Digital AV Adapters or Apple AirPlay) the button becomes active and you can choose a resolution from the list or choose to disable the external output.