If your looking afor a free application to encode video, try MEGUI.
Theres a tutorial on it in the tutorial section.
It can encode a varity of different file types to H264 as well as various audio codecs (AAC,AC3,DTS,MP3) in a few different container types. (MP4,MKV,AVI) at very high quality
(Provided your using a good source)
It doesnt do screen capture though, just a very useful, full featured encoder.
And it is free.
Others prefer Handbrake, which is somewhat similar.
Not sure what a good screen capture/recorder would be. Hopefully others will have a good suggestion on that part.