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Quick steps to getting a h.264 encoder for Virtual Dub.

This encoder works very well, producing great quality video, without eating up Hard Drive space. At midline quality (compression bar smack dab in the middle, the default spot), 1920x1080 videos are only roughly 40 to 50MB big per minute.

Downsides? It takes a bit longer to convert than some encoders, but nothing that'll really frustrate you (unless you have a slower system, perhaps).

To Get:

Go to SourceForge - Search x264vfw - DL either the regular 32bit or 64bit version (depending on whether your VirtualDub/System is 32 or 64 bit) - Open VirtualDub - You can now see it under video-Compressions - Encode your video!

For examples of videos recorded @1920x1080 and encoded with this codec, check out the following videos (read their individual descriptions for more information):

OLD Videos don't look as good, because Youtube compressed them more heavily when I uploaded them years ago.
Call of Duty 4: Modern Warfare - http://www.youtube.com/watch?v=0u2tvrDrpNo
Crysis - http://www.youtube.com/watch?v=5UILtd0nlvs
Quantum of Solace - http://www.youtube.com/watch?v=gi_cMjl_Mu4

More Recent Videos using this process (it hasn't changed, only youtube's quality has):

Skyrim: Destroying a Dragon with Elemental Fury - http://www.youtube.com/watch?v=xcC31IwzqE8
Beat Hazard: A Raw Understanding - http://www.youtube.com/watch?v=a1LmeAvrBbI
Minecraft Jungle Outpost (256x256 Texture Mod) - http://www.youtube.com/watch?v=3_wQeIebyRM

Youtube still has limits on quality, but hey it's a streaming service that allows 1080p video that doesn't require you to cache 100's of MB (unless you have a very long, high resolution video loading of course). The source files uploaded will always be higher quality (much higher quality really). Even new 2012 period stuff has noticeable artifacts in 1080p flash. It's a balance between quality:size.

Virtualdub (64bit and regular) available here: http://virtualdub.sourceforge.net/

x264encoder link (Sourceforge):
http://sourceforge.net/projects/x264vfw/
BTW: Sorry for the way the video is. I can't edit it properly since CamStudio saves to XVID, and VirtualDub can't open it for some reason (VirtualDubMod can, but VirtualDubMod doesn't support the h.264 encoder I'm using, dumb eh?)