It's all a matter of finding a happy medium between the file size you want, the quality you want and the resolution you want.

Fraps has only really 3 factors in filesizes.

Half Screen vs Full screen
Record Sound vs No Sound
Lower Frame Rate vs Higher Frame Rate

After that, I usually toss it into my video editor and add music or toss in some lighting effects or something. I've been using anything from Windows Movie Maker to Camtasia Studio for this and only recently started digging into Adobe After Effects and whatnot. But after I render the video using either of those, I check the file size. If it's still huge, I run it through Prism Video Converter and that usually drops the video down to the size and quality that i like.

I probably went through 10-15 different video converting softwares until I was finally happy with the results of the output.