I personally use Fraps, and I use it to capture my webcam's audio. The volume is a little weak, but I think that's because it's from my webcam. There's a whole bar that allows you to change what the audio is coming from.
But be forewarned that you'll need at least a few GB of HDD before you start recording; a 15 minute video can be about 3GB from my experience. Window's Live Movie Maker compresses it down to 600MB, give or take 150MB, but yeah. P:
Fraps costs money, but it is probably the best thing you can find. Also, as someone else said, the files can be huge, so be careful. Make the movie, upload it, see if it worked, then delete the original recording.
Camstudio is free, and is decent. Far better than any other free recording program I've found, as it has no advertisements, you can tell it what part of the screen you want to record, change a lot of the options on how you'll record, and there is no time limit.
Neither of them can record sound if your computer's audio card or something is incompatible, and a lot of computers have incomparable ones.
dude cam studio on MC sucks like lots its like choppy as hell and doesn't work to well just u know "pirate" fraps you get its from a ship =)
The way politics are going right now, I'd say pirating is riskier than ever. Who says there's no possibility they'll give piraters a death sentence if the DMCAers get their way?
Also, it seems that you're doing CamStudio wrong. Are you using the native CamStudio Lossless Codec? Recording with that at 30fps (though I heard YouTube runs best with 24fps footage, that'd also be much smaller filesize), Minecraft client windowed resolution, on a low-mid system, Fancy graphics and Far render distance, I get great quality, though I still have to tweak the audio sync parameters. The most likely reason you're getting shitty quality is you're probably using the Microsoft Video 1 codec. Artifact-y by design. Seriously.
As far as sound goes, if you have onboard audio, or your card doesn't have What-U-Hear, try setting the recording line to Stereo Mix, which is a fancy term for "whatever you're sending to the speakers/headphones, duplicate the audio stream to the recordinator".
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