Can you render (sorry if i'm using any wrong terminology) in HD using fraps? If you can i'd definitely check it out.
EDIT: reading through your post again a lot of that stuff went right over my head. Just to get some clarification, when I record in fraps what file format is the video saved in? and when you say re-encoding, do you mean taking it from one format to another one?
Fraps is just your standard screen capture app, so it'll record at whatever resolution your monitor is (well, up to 2560x1600 apparently, according to their site, but... yeah ;). So if you're running your monitor at 1920x1200, for example, then that's the resolution of the video (though there may be options to record at a lower resolution, it's been a while since I've used it for video, unfortunately).
As for the format of the video, I believe that it's in an AVI container (and the video inside will be in some standard sort of format, nothing you need anything special to decode). It's pretty raw video and so takes a bunch of space. And yes, re-encoding is when you take it and output a different format (encoding is the process of writing, and decoding is the process of reading). So in this case you'll use Fraps to get an AVI file, then use another app to turn the AVI into something else that will be suitable for Youtube or whatever.
EDIT - And for clarification, the process to use something like Handbrake or SUPER (or anything similar) would be that you'd open the AVI that Fraps created, then tell the program to save it as whatever format you're interested in. It's usually a pretty simple process, and then you let the application do its thing. ^^
I really should check if Handbrake can open AVIs, because it's not its main target and so it may not do it, but it's got a pretty simple UI, especially compared to SUPER (which can be a little confusing at times). I'll see if I can check on that when I get home. ^^
EDIT2 - Looks like Handbrake should be able to read most any common sort of format, it's just the output that they've restricted these days (H.264 in MP4 or MKV). Edited, Sep 9th 2010 3:45pm by Triane