Uwe Girlich's Demo Specs page has a new version 3.3.0 of the Little Movie Processing Centre, as well as updated documentation by way of the unofficial DM2 specs v1.0.4 and the Recording FAQ v1.1.3. Uwe includes word on how these updates are related to the Quake II Relay project and how that could affect the handling of demo recording in Quake III Arena:

These 3 updates are strongly correlated and show my support for the Quake II Relay project (http://www.planetquake.com/relay). This Quake II server modification introduces an extension to the well known DM2 file format and it was my duty to describe it and support it in LMPC.

This project may show a new direction for the Machinima community. The modified server stores a recording during the game play in a file (similar to server recordings). This file can be edited (with LMPC and a text editor) and reloaded into the server. Now it can be replayed by any client, who connects into this server. If we can recreate a similar modification for Qake III Arena, we don't need any reverse engineering of the DM3 demo format or the network protocol at all.