I just copied this from PBBANS, it's a good start. I'll put something together in the near future... any questions let me know.

Just remember to change to first person view when recording a COD WaW demo.

IP: When recording Demo's of a suspect, try to keep them short depending on what you think they are doing... for instance, an AimBot is pretty obvious and should result in a shorter demo than say a WallHack demo which may require more recording time to make sure the suspect is actually WHing.

CALL OF DUTY 4 DEMO GUIDE:

RECORING THE DEMO:

1) Launch Game;
2) Enter Server;
3) Bring down console (press ~ on keyboard, the 'tilda' key is next to the #1 key, don't press shift when pressing the tilda key);
4) You should see a bar at the top of your screen where you can type in;
5) Type: /record me You don't have to call it 'me', note that there is a space between 'record' and 'me'
6) Press ENTER or RETURN on keyboard (Note: Macintosh you can press either, not sure for PC);
7) There should be a message in the lower left corner of your screen that says: RECORDING...
8.) When you are finished recording, type /stoprecord
9) Quit the game and return to your desktop



PUT DEMO RECORDING IN CORRECT FOLDER:
In order to actually play Demo's in COD4, you'll have to physically move the demo file from it's 'recorded demo's' folder to a new 'demo' folder located in the 'mods' section of the Activision sub-directory. Follow these instructions:

10) Open your 'C' Drive > Programs Folder > Activision Folder > Main Folder > Demo Folder;
11) Locate your 'ME' demo recording and drag it to your desktop;
12) Now backup and locate your MODS > ModWarfare folder, Open It;
13) In the ModWarfare folder, make a new folder called demo if there isn't one there;
14) Drag the 'me' demo from your desktop into the new 'demo' folder;



PLAYING THE DEMO:
Using a 3rd party Demo Player:
CYBOPAT is a tool for easy playing demos of game Call of Duty 4: Modern Warfare. You can use slowmotion, faster playing, freezing demo, toggle third person view and toggle view HUD info. (thanks |EAS|Kevin for the tip).

Playing the demo within the game:

15) Launch your COD4 Multiplayer Game, do not 'Join' a game;
16) Below the 'Join' game button, down a bit, click on MODS;
17) In MODS, select ModWarfare (notice this is the folder you put the demo in) and click LAUNCH;
18) After LAUNCH, you will notice that the name COD4 Modern Warfare has a red X through the 'ERN' of Modern. This means you are at the right place.
19) Bring down console (press ~ on keyboard, the 'tilda' key is next to the #1 key, don't press shift when pressing the tilda key);
20) Type /demo me into the console text area. You'll notice that once you start typing the 'M' in ME, that a list will appear listing all names in the demo list that start with 'M'. This makes it really easy to recall what you named future demos as you really only have to remember the first letter;
21) After typing in the demo name, press ENTER OR RETURN on your keyboard.
22) The Demo recording will start playing. You can stop playing a demo by typing /disconnect, otherwise you will have to watch the entire demo before you can quit. It is still good idea to limit the length of time you record demos as some may not know this 'stop' command.