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FRAPS uses a ton of resources in a fairly irresponsible way. About a year ago I started messing around with video recording and I'd have to use similar settings as you're using in FRAPS to be able to record and not have a ton of game lag at the same time. I later found something called Bandicam by a friend's recommendation and the performance I'd get in-game while recording was remarkably higher than FRAPS was ever able to give me even at reduced recording settings like you're using. Bandicam + Virtualdub is what I came to use regularly. ...
FRAPS isn't using resources irresponsibly, it captures frames with as little (or no) compression as possible, unlike many other cheap recording apps (FRAPS is as close to professional capturing as you can get without extra hardware). This allows you to get much higher quality output as a result. However, to handle (nearly) uncompressed frames, and make sure the end result matches as close to the desired rate, FRAPS needs to slow the frame rate of the game down to match.
If you want decent performance while recording with FRAPS, you need:
- 1) a decently modern and somewhat beefy machine with equally modern and beefy video card,
2) record at higher frame rates such as 60 FPS (you can then downsample to the desired rate),
3) have more space for the increased size from higher FPS, and
4) a harddrive that can handle the i/o (i.e. if you're using a "green" drive, give up now).
If all you want to do is record videos for youtube, you'll probably want different software, like Cyn suggests.