Yup, looks to be about as good as we are going to get with Fraps.
I too hate that we have to use Fraps, however, there is hope on the horizon;
"We've shelved that for now until we can do some more improvement to the film viewer. We're not happy with the quality of the output that the film viewer provides,
it's just not smooth enough to give a good reflection of the game." - Pyro in an email from a while back regarding film making.
I believe this implies not only the obvious but also that the film viewer export will improve, hopefully to a state where we can abandon Fraps altogether and not lose the clarity, detail and vibrancy that Fraps ignores.
I too, for the moment, am stuck halving the speed and then doubling up post capture - which is apparently as close as Fraps will let us get to making decent quality films.