Solution: By an external hard drive. As much as you'd like it, there aren't many compression standards out there that'll keep the quality of something while reducing the size of the file. It's really just not worth it. The quality of Fraps isn't that great anyway. Compressing it is just going to make things look sloppy and amateurish. Just spend the money on an external drive.
If you must compress things, I'll suggest using Xvid or DivX. Both are decent in my opinion, though I don't really believe in compressing things. I paid money for this hard drive, and I'm filling it up!
Edit: If you're just looking for a program, check out SUPER©. I know the website doesn't look very nice and you'll have to do some clicking to get the the download, but that is the best encoder/converter I have ever used. Many many options.
If you must compress things, I'll suggest using Xvid or DivX. Both are decent in my opinion, though I don't really believe in compressing things. I paid money for this hard drive, and I'm filling it up!
Edit: If you're just looking for a program, check out SUPER©. I know the website doesn't look very nice and you'll have to do some clicking to get the the download, but that is the best encoder/converter I have ever used. Many many options.