Alternatively you could use Virtualdub with x264vfw to encode your video's HD quality. However I do stress the need for your videos to be at least 720p (1280x720)
These are my settings:
So you download Virtualdub (Freeware) Download
Then get x264vfw (Free codec) Download and install it.
Set up Fraps like this:

Set up osu! something like this if you can:

You might wonder why I use 1280x800. This is because it comes as close to 720p as osu! gives you the option to render
Then go ahead and record a replay of yourself of even when spectating someone
Extract Virtualdub to somewhere and open it.
Open the avi Fraps made in Virtualdub (File->Open Video File)

If your video is that long so that Fraps generated multiple files you can just go to File->Append AVI segment so it will put the videos behind eachother
Ok first problem. Youtube loves videos the most when its fedded in 720p but we just recorded using 1280x800. This is where a little editing comes in handy.
Go to Filters (Video->Filters or CTRL-F)
And from there click on Add and search for the resize filter.

And then from there we can setup the settings for resizing to 720p correctly.

Here I choose for a Letterbox/Crop. I choose this options because you will always maintain your aspect ratio and the quality will not go down. All we'll be doing is cutting off some of the screen which is irrelevant.
Then its time to setup the codec we'll be using for encoding the video to a youtube acceptable format.
Go to Video->Compression and search for the x264vfw codec you installed.

In this screen you can see some of the settings you can make as where the ratefactor should be noted as one of the most important settings in here. This ratio will be make or break your video's quality and try to regulate the filesize as well.
I use 25 myself because I found out this has been working rather well. But if anyone has better settings that will make the videos even more better on Youtube, don't hestitate to tell me.
Also make sure the Virtualdub Hack is checked.
Now we have the basic settings to make a good video.
If you are smart I recommend saving the preset you just made or just lazily download my processing settings here
You can accomplish this task by going to File->Save Processing Settings, (Load for loading them
)
Then you could eventually cut out some material you don't want or add some text in virtualdub itself. I refer to the helpfile/FAQ's from Virtualdub itself for that.
Well then you can just go to File->Save as AVI, Choose a spot and save
You should see the status of the movie you're rendering.

After you are done you can upload the file to Youtube and after it's been processed it will show up and get the HD version a little while later.
And thats how you do it with Virtualdub and x264vfw
I am rendering the file used in this tutorial as we speak and will be editing this post to link to the video to show you guys the quality
Have fun!
Jeffro
Edit: Here is the video aka the result:
These are my settings:
So you download Virtualdub (Freeware) Download
Then get x264vfw (Free codec) Download and install it.
Set up Fraps like this:
Set up osu! something like this if you can:
You might wonder why I use 1280x800. This is because it comes as close to 720p as osu! gives you the option to render

Then go ahead and record a replay of yourself of even when spectating someone

Extract Virtualdub to somewhere and open it.
Open the avi Fraps made in Virtualdub (File->Open Video File)
If your video is that long so that Fraps generated multiple files you can just go to File->Append AVI segment so it will put the videos behind eachother

Ok first problem. Youtube loves videos the most when its fedded in 720p but we just recorded using 1280x800. This is where a little editing comes in handy.
Go to Filters (Video->Filters or CTRL-F)
And from there click on Add and search for the resize filter.
And then from there we can setup the settings for resizing to 720p correctly.
Here I choose for a Letterbox/Crop. I choose this options because you will always maintain your aspect ratio and the quality will not go down. All we'll be doing is cutting off some of the screen which is irrelevant.
Then its time to setup the codec we'll be using for encoding the video to a youtube acceptable format.
Go to Video->Compression and search for the x264vfw codec you installed.
In this screen you can see some of the settings you can make as where the ratefactor should be noted as one of the most important settings in here. This ratio will be make or break your video's quality and try to regulate the filesize as well.
I use 25 myself because I found out this has been working rather well. But if anyone has better settings that will make the videos even more better on Youtube, don't hestitate to tell me.
Also make sure the Virtualdub Hack is checked.
Now we have the basic settings to make a good video.
If you are smart I recommend saving the preset you just made or just lazily download my processing settings here
You can accomplish this task by going to File->Save Processing Settings, (Load for loading them

Then you could eventually cut out some material you don't want or add some text in virtualdub itself. I refer to the helpfile/FAQ's from Virtualdub itself for that.
Well then you can just go to File->Save as AVI, Choose a spot and save

You should see the status of the movie you're rendering.
After you are done you can upload the file to Youtube and after it's been processed it will show up and get the HD version a little while later.
And thats how you do it with Virtualdub and x264vfw

I am rendering the file used in this tutorial as we speak and will be editing this post to link to the video to show you guys the quality

Have fun!

Edit: Here is the video aka the result: