the point of huge recorded file sizes is so it can record at high quality without lagging you.
as to normally screen record at full game res and quality would never work. compressing as recording is processor hungry.
but your supposed to toss it in windows movie maker or some other app to compress it afterwords.
the best things on computers are not made to be the easy way out for dummy's.
quality > simplicity
i took a 5-6min avi recording on HL2, that came to like 4gigs.
compressed to 86m wmv. at damn good quality compared to youtube stuff
fraps+windows movie maker
http://bisjac.net/bisjac/vids/Bisjac%20frag.wmv