I'm running into issues when I take my fraps footage, and try it get it in nice crisp clean youtube footage.
I've tried a variety of different codecs, and while I can get game footage to turn out as perfect crisp clean footage on my machine, at a reasonable file size using avc/h264 codecs, something goes wrong when it uploads to youtube.
Youtube will eventually process it and put it in 1080p (the res I am recording in) but it gets all grainy and the text of unit frames etc becomes very hard to read.
I know that it is possible because I have seen some ultra clear perfect 1080p gaming footage on youtube. And since the footage ends up percect on my machine before upload, I think it might just be a case of finding a codec that plays nice with youtube.
No matter what you do to your videos, you will always have to contend with youtube's flash encoding- and that is what is taking that fine clarity you are seeking away. You can even upload an FLV file, and youtube will still re-encode it again. I believe the problem is in the bit rate, not in the resolution. Youtube will reduce this because of their incredible bandwith problems, with millions of users watching videos all the time. And as soon as your bit rate is cut even a little, you see the difference.
So about the best you can do is to provide the highest bit rate you can on upload, to get the highest bit rate they will allow upon their flash re-encode. This has nothing to do with editing text in video editing software.
Frankly, I rarely get any HD video to play back smooth on youtube without letting it completely download first. 480 and below will do this, but not HD. Not usually. Even during lower usage periods like real late at night, HD still requires waiting.
But I got in contact with someone who has some flawless videos up, they are also using avidemux, but just said 'use avc codec, ac3 audio, all other settings default' and their videos come out like this: