Sorry wolfie, didn't see your post earlier... Movies are stored in var/mobile/Library/Keyboard/DisplayRecorder
When you select the video under the app....it will allow you to also export to camera roll if you have it set to record in .mp4 format under settings.
Ow do you select and save to photo library? I don't see a way to select. And I can't set it to mp4. All I can do is avi or h.264.
When you record as H264, open up the DisplayRecorder app after you have recorded a movie. Then click the movie in the list and a pop up will show. The bottom option on the popup is send to camera roll I think... (that is the photo library)