So far, it looks like Fraps is the more effective way to record gameplay into movie files. When I use the in-game application, it takes a really long time to render.
My question to the community: What do you prefer to use and why?

Fraps, of course. You could always convert Fraps captures into DivX if you like...

Really? How does that work, because I just got again after my hard drive wipe, and I'm just turning my AVI's into WMV, so I don't get quite the compression. Do you use the program itself, or do I have to download something extra?

Oops! Sorry for not getting back to you bro!

You can use Dr.DivX to convert almost any type of video file into DivX. Of course, it's best to convert straight from avi into divx, but it will also convert wmv's into divx files.