Recording screen interaction for UI playback

Before I resort to scripting my own, is there a tool that records screen interactions for playback?

I want to record where the mouse got clicked and on which menu, in order to automate a series of steps.

I am planning to use xdotool to play back actions - but I am open to better alternatives, so my plan is to have a script record mouse position and take a screenshot at regular intervals, and then edit the results.

kind of like this (untested yet, and screenshot file name clearly needs to change):

while [ 1 ]
do
    gnome-screenshot -pf foo.png
    xdotool getmouselocation
    sleep 2
done

Any better solutions out there?