How can i fix Fraps annoying audio?

I want to record with my gamer headphones on but all i ever get is a real high pitch tone and the audio is really quiet in the background, when i open my volume menu all i see is Speaker,Wave,Sw synth, and Cd player. And why are frap's video so big my videos are like 3 gigs which is kind crazy lol any good avi to wmm converters?