I use Fraps to capture, Full-Size @ 30fps.
LFS: 800x600 16bit, and fps limit at 30 (Option>>Misc)
I use Adobe Premiere, add the clips and put them together, effects, music, all there.
I export, as Microsoft AVI. codec: uncompressed. at 720x576.
than i open it in Virtual Dub, go to Video>>Compressor, and i choose Xvid and you can play with settings to get the best quality, i used 4.0.
than File> Save as Avi (or press F7).
name it whatever, and it should be there.
I hope i didnt skip anything...
Video Programs:
Adobe Premiere
Adobe After Effects
Sony Vegas
also Pinnacle Studio (a lil better than windows move maker).
Codecs:
Xvid and Divx
also some get good in WMP 9 Codec.
hope it helps!
thats what I did.. and i got this movie.
http://www.lfsforum.net/showthread.php?t=11607