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After creating the "Make Money Fast in Free Realms" video and spending a lot of time dealing with the settings to make it work, I thought a guide for all of you would be helpful!
 
Most of the tweaking revolves around Youtube's 1 GB limit for video uploads and optimizing for best quality while sliding in under that limit.  With the settings below, you'll be able to take a 4.5 minute video at just under 1 GB.
 
Click the Settings icon in the upper right and select "Video Capture".
 
Free Realms Video Settings
 
After creating the "Make Money Fast in Free Realms" video and spending a lot of time dealing with the settings to make it work, I thought a guide for all of you would be helpful!
 
Most of the tweaking revolves around Youtube's 1 GB limit for video uploads and optimizing for best quality while sliding in under that limit.  With the settings below, you'll be able to take a 4.5 minute video at just under 1 GB.
 
Click the Settings icon in the upper right and select "Video Capture".
 
Free Realms Video Settings
 
Make sure the "Show Video Capture UI" is selected and then grab the Quality slider and slide it one step below maximum.  It looks like mine is set at maximum, but it is just one tiny step below it.  This step makes a huge difference in file size! Click "Capture Resolution" and set it to "Medium".
 
You should see the small video camera icon on the upper left of your atlas.  Click it to open up the video capture menu.  You can see where the videos will be stored on your computer and it also lets you specify a Youtube account to upload to.  (It will ask your password once you've taken a video and decide to upload it).  You can also upload them directly to Youtube.Com by navigating to the My Videos directory on your computer.
 
Youtube Free Realms Settings
 
Remember, your video will be scaled down to approximately 450x350 pixels so everything will be smaller when viewing the video.  I found that zooming in (use your mouse scroll wheel) when you want to speak in-game makes the words easier to read.  Here is a demonstration of how your spoken text would look in both zoomed out and zoomed in.
 
Free Realms small words video
Free Realms big words video
 
If you're taking shorter videos (or don't want to upload to Youtube), you can increase the resolution to High.  I believe it records at about 1 GB per minute of video.

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