Lengo, the video is captured in widescreen, but things like youtube use a 4:3 aspect ratio, hence the bars at top and bottom.

Yes, video files can be large. I have not captured video in Fraps as yet, so not sure whether it is interlaced or not.

I use Adobe (starting to use Vegas Movie Studio) and once I have finished editing I export it as uncompressed DV. I then take that in to VirtuaDub, where I resize it if necessary and de-interlace (these are done by adding filters).

When I saved the butterfly video with the deinterlacing, it came to 4GB for a 3 minute video, so I am sure I can do more to get it down while maintaining quality, but it is a temporary file so am not too worried about size.

At the moment I am using Any Video Converter for the last stage which is compressing it as .wmv file. Then I upload. The Vimeo video was 15MB. I am not sure if this is still considered large or not. Still learning here myself.

Not sure if any of that helps....