1. Cam studio is free, open source, and doesn't need to app-hook, you can literally (and simply) just record anything box-size or full screen.
2. On YouTube HD (if you bring up the box and switch it to 720p), the picture is actually *more* clear than your fraps example!
3. I am using a lossy codec, but balancing it with a high bitrate for the quality. This creates 15 minute videos ~500 mb. For me, that has the advantages of a) youtube will actually allow that file size as a standard upload (it converts them to mp4 post upload) and b) I retain quality and don't have to do any post-editing at all unless I run too long and split videos. For me, this represents a reasonably strong-quality compromise.
The reason your video quality is lower than mine despite you using what most consider superior software is your settings. I'd imagine you're using a codec unique to FRAPS - probably a lossless one for max quality but big filesizes. However, by selecting "half-size" you are compromising on quality significantly - far more than I am via using a lossy (but advanced) codec like divx (there are alternatives, but divx seems to work nicely for me with camstudio). IMO you should record segments in full-size then convert the files to a more reasonable size (that is what I did when I ran with xfire for a bit). As it stands right now, youtube isn't letting you put videos above 480p and that makes your screen considerably less crisp!