I always use a combination of Huffyuv and Xvid.
There aren't many codecs that can resize on-the-fly. (I think DivX does. Can't remember as I don't even bother with it any more.)
Huffyuv is a lossless codec, so what you record is exactly what you will see in the video. (unless you record in RGB and convert it to YUY2. In this case there is some color loss, but it is insignificant) It does use some compression, but the file size will still be huge. It's also very fast and uses relatively little CPU time.
After you record, open the video in a program like Virtual Dub and edit it however you like. (delete scenes, resize, crop borders, etc.) Then set the compression format to 'Xvid' and configure the codec to your liking. Press F7 to save.
You can also just use Xvid, but then you'll still have to resize the video. Double encoding a video is not recommended as it further increases video quality loss...