Quicktime Screen Recording doesn't work in Lion

When starting a new Screen Recording in Quicktime Player in Lion 10.7.3, as soon as I click record I get this following error message:

Here's a video demonstrating the issue: http://db.tt/CROyXgIt

Here are the settings under the triangle on the right:

Solution 1:

Finally figured it out - apparently the Movies folder in my home directory had a weird permission set on it and things couldn't be written to it, which caused QuickTime to give a very descriptive message "The operation could not be completed" and saving to a different folder (or after fixing the permissions on Movies), worked.

Solution 2:

Simply restarting my mac worked for me.