Very Good Free Lossless/Lossy Video Encoding For Editing on Windows 7 (regarding fraps recordings)
You want to use VirtualDub to convert your FRAPS files. Just drag the clip into the window, select video from the top menu -> compression. Change the codec to Avid AVI Codec 2.0d2 and then configure it to your desired resolution. BAM! The outputted files should work.

You can also try MediaCoder and XVid