in my experience, Fraps causes alot of Frame rate loss, and Xfire... well quality is an issue, but it's workable, I'd say Xfire would be the better bet
Growler GunCam is a great tool to use. Free Version has unlimited time although you will have a large DEMO stamp over the video when you export. And if you don't want the stamp, just turn your computers clock back a few months before you export then no more stamp. (So you have 15 days of no watermark)
Works great and is very smooth and good quality to boot.
Fraps isn't exactly free... unless you're a pirate. Unregistered it only does 30sec clips and puts a watermark on them.
Before I obtained a copy of fraps I used gamecam lite. It did have a watermark, but the thing I liked about it most was the size of the files it created. 3-4 hours of footage crammed into less than 300mb, with little loss in quality. It does put a watermark in the bottom corner, but that's nothing too major.
I use either xfire or ZD soft Game Recorder. ZD soft leaves an annoying timer in the top left corner though.
Interestingly xfire ingame video works smoothly in Crysis and Crysis Warhead while it is horrible in older games... But thats probably my PC being screwed.