It's all about the codec. I don't know much about PC recording, but I do record footage from my Wii for my Let's Play, and it's recommended to use a lossless codec, which means no lost quality but huge amount of hard drive space. I assume the TV and movie usenet groups and torrent sites do something similar, recording at lossless and then converting the video under xvid/h.624.
What program are you using to record your screen, anyway? It's likely recording as lossless, in which case you convert the video to a lossy format like h.624 using a program like Handbrake or MeGUI, or just record in that format to begin with, though it's safer to do the former, even though it's more work.
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Wylvane
Guru Contest Winner Black Turtle is a wonderful user.