For Red5/Flash video recordings, if you have checked "Auto Convert to MP4" in the Poodll filter general settings, processing will go through the normal flow where the file is converted to MP4 and returned to Moodle. You can confirm this setting has been applied, because the 'mp4' checkbox should be checked on the Flash video recorder by default.
The checkbox looks like this.
If however "Auto Conv. to MP4" is unchecked then the .MP4 checkx will be unchecke3d when the user loads the recorder. In this state, and or if the user manually unchecks the box, the recording will not be converted to mp4 an will remain as FLV.
This will be fixed in an upcoming release of Poodll. But in the meantime be sure check the auto convert setting.