Registration is a way of keeping track of breeding dogs and their pedigrees.
Recording is exactly like registration in the eyes of the club, and the dog basically has the same priveleges, but there isn't a need to further make record of the dog's pedigree information. This results in less work for the club registrar, so there is a substantial savings involved with recording as opposed to registration. The ONLY thing that recorded dogs don't do, that registered dogs do is show in open conformation classes. These classes are strictly for people who will likely breed their dogs. There really aren't any drawbacks to having a recorded dog.