I find collecting data using peer observation and assessment works very well in physical education classes. With all of the classroom management and movement going on in our classes, it keeps all students engaged and on track. Students for the most part are up front and honest with one another and it allows for data to be collected a lot more quickly than if the teacher observed each student individually all while supervising and keep all the other students on task. Data can be imported onto an excel spread sheet, or into the grading system used by the teachers. If enough technology is available students can use iPads, or even their cell phone using a particular application. It can be done as simply or as intricate as the teacher feels comfortable.
It depends on the type of data your trying to collect. If its for grades then I would use a rubric and simply look to see if students are executing the movement cues.