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FRAPs doesn't compress its videos when you record, so the files are enormous. In a long recording you can get up to a few hundred gigabytes.

Obviously, usually you would need to convert/compress them. What affects the speed of this? I don't think the RAM does, as when I converted 600 gb my RAM usage only went to 6 gig, but the processor was at 100%, which is surprising as I have a 6 core processor @ 3.46 ghz. Would clock speed or cores help the most?

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A dedicated encoder chip would help the most. –  Ignacio Vazquez-Abrams Mar 27 '12 at 16:59
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CPU power. As much as you can get. Or dedicated hardware (quite common for MPEG-2 and h.264). –  slhck Mar 27 '12 at 17:03

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Since encoding is usually a highly parallelizable task, many cores will give an almost linear gain (i.e. 6 cores is ~three times as fast as 2 cores).

See e.g. http://macperformanceguide.com/Optimizing-Handbrake.html for some real life numbers. The article also mentions that at least Handbrake doesn't scale well beyond 9 cores, so many more than that won't increase speed (unless you run several parallel jobs, which probably is connected to other slowdowns, though).

RAM is used to keep the images in memory which is needed, but the limiting factor will almost always be CPU power.

So: if all you want is encoding performance, cores will give you the best boost per monetary unit (within reasonable bounds).

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