Alot of people use Windows Movie Maker for adding text and basic effects. Can't comment on a recorder, I've only ever used Fraps.
Originally Posted by TestECull
1. Render a game at a playable FPS. This is hard enough as it is.
2. Render each frame twice.
3. Store those frames in memory.
4. Write those frames to disk while encoding it(Albiet in an easy to encode format).
5. Continue #1 through the entire process.