For recording "normal" PC games (meaning: directX or openGL, no weird stuff) today's best bet is Bandicam. Unlike Fraps, it can use any VFW codec for output, providing that codec supports zero-latency output.
So, you can record 720p or 1080p videos with any lossless codec (for example, x264 have lossless setting and properly supports multi-core CPUs).
A nice lossless compression will cut down video stream from enormous to much more manageable sizes. For example, I'm getting 1Gb of output for each 2-3 minutes of
[email protected] record. Much less with 720p. Compared to just saving it in YUV12 that's 5 to 10 times smaller.
Of course you'll need a good CPU.