Need help correctly recording in 720p

[GamerKingFaiz]

Hey guys, I've been trying to record a game of Starcraft 2 in 720p for the longest time, but I've been running into quite a few problems.

The first try I did, I recorded using Fraps at 1024x768 and at half quality on Fraps, and I came out with pretty "meh" quality:
http://www.youtube.com/watch?v=FO0LY5p2KPE

Then I tried to record at 1280x720 in Fraps at full size, and I got better quality:
http://www.youtube.com/watch?v=OizdplbOBZk


But the problem is that Fraps video files are really big, so I decided if I am going to be uploading this, I need to compress it. So I used Windows Movie Maker, and saved the movie in a 720p format, and it definitely reduced the file size into something more easy to upload. But the problem is that I now get black bars on all sides:
http://www.youtube.com/watch?v=OkK0hvAQ49Q

How can I compress a video but keep it widescreen without any black bars?

 

[GamerKingFaiz]

Alright, I got everything to finally work out. I used VirtualDub with a Xvid codec, and it compresses great with minimal to no loss in quality!

Like check out this test clip for how my future broadcasts will look:
YouTube - Full widescreen 720p test