Credit to Shan111 for this step by step guide he gave me, on how to use Fraps correctly for videos (the default file saving is AVI, which is huge!)
I use Windows Movie Maker which comes with Vista Ultimate to compress. Here's a guide:
) Download and install Fraps. While in-game press F9 (Default key) to record video.
2) Open Windows Movie Maker (vista). Click File-New project.
3) From 'Task' selcect Picture or Video and browse to the folder where the vid has been saved by Fraps. Select the vid.
4)Now drag the picture of the selected video which has appeared, to the 'storyboard' section (lower left corner). Place it on the tab which shows 'Drag media here'.
5)Click 'Publish Movie'.
6)Select 'This Computer' and click 'OK'.
7)Selct 'compress to' and enter a value in the appropriate field. I usually select 8MB. Note that the max size of compression dpends on the video quality etc so all values may not tbe availiable for a particular vid.
8) Click 'Publish'. Done! Upload from youtube.
If you dont have Vista, then you can use XP's movie maker (was there one? I've stopped using XP long time back).