I've only made a few in-game videos before. But how I've done it is I use the in-game recording system. However, I haven't edited any of the videos. But something you can use to edit is Movie Maker. I've used Movie maker before, but it's been a really long time.
To Start and Stop Recording: -
Press the V key to start and stop the video. When you're recording, there is a yellow line around the screen.
To View and rename the file go to: -
Documents > Electronic Arts > The Sims 3 > Recorded Videos folder to view and/or rename the video.
Here's a HowTo from WikiHow. -- How to Put Sims 3 Videos on Youtube Using Movie Maker.
http://www.wikihow.com/Put-Sims-3-Videos-on-Youtube-Using-Movie-MakerSome video recording software - (I don't have any personal experience with these programs, they are just posted as a suggestion.)
Fraps --
http://fraps.com/ Ezvid --
http://www.ezvid.com/Guide for new users who want to record their games.
http://letsplay.wikia.com/wiki/LP_guide_for_newbiesHope this helps,
MrsFlynn