You need a more recent version of Xnee.
There have been problems with the RECORD extension (extension to X11)
for a while. Since the updates of X.org and RECORD you need a later Xnee.
Either go for cnee from the latest unofficial build:
http://itupw056.itu.chalmers.se/xnee/install/bin/
I am using Kubuntu 11.04
/tmp# uname -a
Linux lintop 2.6.38-8-generic-pae #42-Ubuntu SMP Mon Apr 11 05:17:09
UTC 2011 i686 i686 i386 GNU/Linux
/tmp# cnee -V
xnee 3.06
Copyright (C) 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008,
2009 Henrik Sandklef
/tmp# cnee --record --events-to-record 1
