I did a quick google search to find out how professionals create smart phone demos and then did my best with the resources I had to emulate them. First, I placed my Canon Rebel on a tri-pod with a 55mm lense about a foot from my desk (after trying several angles I found that getting up close to the phone gave me the clearest image of the screen). To help eliminate glare, I needed some overhead lighting. So I stacked a pile of books on my desk and placed a desk lamp on top of them, shining the light down directly over my phone. Satisfied with my lighting and viewpoint, I filmed about a minute and a half of myself playing SEMA's Flash Farm game.
For post production, I headed to Mattie's place and we used her Mac Pro to put in some basic looking descriptions in iMovie, letting the viewer know what they were watching. Finally, we uploaded the film to YouTube and voila! It's far from anything you would see on a TV ad, but the ability to send interested contacts a link to a YouTube video rather than having them go through the arduous process of downloading the alpha version and figuring things out themselves is an incredibly valuable marketing tool.
Check out the results below and let me know what you think in the comments.