I use fraps to capture the video, but then you need to convert it using a different program. Microsoft has a free software which is decent called Windows Movie Maker (you might already have it on your PC) that you can use to add titles, effects, audio, and other stuff. When you go to save the video it gives a few compression options that will change the format and reduce the size (and quality) of the movie.

Once you learn movie maker and Sony Vegas is a very very nice mid-level program for doing advanced stuff. easily to learn and operate once you have a basic knowledge and gives more options for compression and supported file extensions