I use
Fraps to record all of my videos. It hasn't been updated in a long while, but it's still very useful for people with crap computers, for one main reason: it doesn't do much real-time compression at all, so it has less of an impact on your framerate while recording. The tradeoff for this, of course, is that the video files it outputs are absolutely
massive compared to other recorders - right now, I have two 4-minute YS clips that are almost 4 gigs in size. So with that in mind, if you wanna use Fraps, I'd advise getting a separate video encoder like
Handbrake to compress and cut the file size of the videos down.
As for editing, until July, I exclusively used
Windows Movie Maker 6 (the Vista remake of XP's WMM 2.6). It's pretty self-explanatory to use, but that's obviously in exchange for it being pretty limited in what editing it lets you do. I've moved up to Sony Vegas 13 since July, which is much more advanced, but still not too hard to learn to use.
(An example of the jump in action:
this video was made with WMM 6 in May, while
this one was put together with Vegas 13 in October.)
Fraps and Vegas 13 are both payware though, so unless you're looking to make something really professional, they're probably not
necessary. They're just the tools I use as a guy who's been making YS vids for a few years.
(EDIT 3/18/2021: Forget Vegas 13. Vegas 16 is even better.)