We have not used video for skills testing, but we do have flip cameras that we use to video tape the students during physical education classes. The purpose is to upload the videos on our school webpage, in order for the parents to see what thier children do in our classes.
My high school PE classes have a few required proficency movements that we use video to help kids work. We video kids doing activites such as form running, A Skips, lunges and a few others. With the kids being able to watch themselves, they can see the flaws in each activity and can create a better plan of attack for improving them and reaching their proficency requirements. It's pretty simple. I usualy video on my phone and show the kids right away for instant feedback.