Set it to 30FPS, since 4GiB for 1 minute is stupid, lol.
My settings are: Full screen, 29.99 FPS. Giving me like 1GiB per minute.
If you want it to auto-encode.. Nope, fraps doesn't have such thing. You'll have to find another program for that. But the problem with those recording programs is that the quality will decrease dramatically because it needs to convert the raw file as fast as possible.