[Chubfish]

I use VirtualDub/Vegas for all of my videos if I'm editing a video or compressing. Also I would record with fraps because I know an even easier way but I prefer HyperCam2 still because I will always get 30 fps (youtube limits videos to 30 fps making 60 fps useless/blurry), it will compress during the record for added laziness and I wont have to edit with VirtualDub/Vegas unless it desyncs or something else random occurs, which is unusual.

Also it is harddrive friendly and I wont be spammed with uncompressed video of my 2 hour recording sessions. This would probably be useful if I was on an older pc but my PC is fine.

I'd recommend you use VirtualDub if all you're trying to do is compress the video, since WMM can gimp the quality.

I use Vegas if I want to preserve the quality but also add effects and whatever.

Windows Movie Maker doesn't have nearly as many options as Vegas, and in terms of compression the wmv file isn't as nice as what I can pull off in Vegas and VirtualDub...that being said, this would probably work but I would have to feel the amount of effort whoever makes videos this way is a bit too much.

EDIT: I didn't notice that you said this way doesn't record FMV's very well and is choppy. Well hypercam2 is better then. Oh well. Also I end dwm.exe when I start windows up because it causes problems