Something that will help a lot with the video quality is to disable resampling in your video editing tool. If you're using vegas, right click on the clip in your video track, go to options and change the option from "smart resample" to "disable resample". Resampling blends frames together if the framerate doesn't match exactly, but it just makes things look blurry in video game footage.
Also, not sure what video card you have, but if you've got a newer nVidia card, you can use shadowplay instead of fraps to get rid of the logo and possibly get higher quality videos.