I have the latest FRAPS and have conducted some experiments to get the best setup, it seems like most recording to another drive is best, make sure the speed of the drive is fast to write and it is a good idea to have a fairly decent system to start with, that being said to get full 1080P using FRAPS at 60fps is a task to say the least.
There's two workarounds... one which i use is the 'hardware' method, but at this present time because of the fabled 'flicker' bug interlace problems exist for me using my HD.PVR (1080i) and causes the output to be less than sharp for my standards, the HD-PVR go's through various other devices just to reach it... (HDMI-Scaler and HDFury-3) not the best way or the most cost effective way of recording game play videos but you won't get any drop in frames per second while in game obviously and so you should get a 1:1 copy of whats happening on your screen without any lag.
The other way is to dumb down but don't let anyone know it

thats to say... if your system is fast enough, record at 720p (1280x720) you'll have to play at this resolution also, but the frame-rate of your videos should be much higher (should easily do 60fps) then you can either upload/convert for youtube to either 720p or scale them up to 1080p (via Sony Vegas or an Adobe product) which can be done easily and still looks good.
Example video output of my PVR setup described above...
http://www.youtube.com/watch?v=LlPmBSJOp3E