My iphone 4 does not record sound while making a video, also while making a call on speaker phone the other person is not able to hear me, but when i make a call from handset mode other person is able to hear me .

OMG.....this very tiny hole located next to the headset jack........I suffered for the same issue around 20 days after purchasing my iPhone 4S. Even I visit the apple store too, they suggested to talk with apple online.....just before going to apple, i was reading "iPhone: Hardware troubleshooting" (http://support.apple.com/kb/TS2802) and at the very first line, i found "Make sure that nothing is blocking the top microphone (located next to the headset jack)." and this located next to the headset jack solved the problem completely for sound in vidio as well as sound with calling speaker phone.....Actually, I purchased a plastic cover (like screen protector type) that blocked this small hole (microphone hole i think) and the problem was because of this...I remember on the first day i talk with speacker phone (nothing on iPhone at that time) and it was working...

No need to restore or hard reset anything...i was fearing i'll lost everything if I hard reset my iPhone that took 5-10 to build my iPhone as I like apps, music, vidio on it....

take a look at this easiest way to fix it.

https://www.youtube.com/watch?v=Fvtxp8VaMpw