VirtualDub is a GREAT (and free!) program for capturing and compressing video. You can get the source code at
http://virtualdub.org. It can also render parts of video, so you dont have to keep the parts that you don't want, which can be very useful when you get to the editing stage of your video. Now, I reccomend a codec called Huffyuv, I don't know where it is located on the web, but it is easy to find. All you have to do is Google it, and I'm sure it will come up. This codec is a lossless codec, which means you will lose NO quality whatsoever. Pretty sweet huh?

But there is a catch, it eats up your harddrive like a mofo. So if you have a lot of space, I reccomend the above. If you don't have a lot of space, just use wmv compression. Get Windows Media Encoder, or im sure that your video editing program has a compression export option similar to that. Hope that helps.