What cmontyburns said is right, but if you use SD card you can overcome that problem in:
Mydlink.com > Settings > More Settings > When SD card is full

My configuration:
Continuous recording to SD card:
Profile1
Mode:H.264
Frame size and View window area: 1280x800
Maximum frame rate: 7
Constant bit rate: 2M
Size of each file for recording: 50 Mbytes
Total cycling recording size: 31200 (BUG this option don't work, as cmontyburns said)
Motion detection:
Profile2
Snapshot: JPEG
Frame size and View window area: 1280x800
Quality: Excellent
Send 7 post-event images (with date and time suffix) to Networkstorage (USB pen attached to router)
With this configuration I have 36Hours of good video on SD card, and limitless snapshots of motions detected, organized by folders with date and hours.
I achieved this configuration by spending hours/days/months of trying every single option
I have a schedule reboot every day at morning and still have 1.03.06 firmware