I've been slowly getting my feet wet with this throughout the year, and I have used the free trials of several products, such as D3DGear, Mirillis Action, Dxtory and many others.
I'm still learning, so my understanding may well be flawed, but it seems to be that no matter what one uses, the compression which youtube employs drops the quality of your video considerably. The only thing I can think of to attempt to try and get around it is to either record raw + have a super fast internet connection along with HUGE amounts of disk space,..... or as mentioned, elect for larger file sizes (but not as insanely big as I previously suggested) which is much more practical, of course (e.g. AVI / MKV - the latter which won't work in WMM which is a shame). :/
To give an example : I uploaded a System Shock 2 video last night which I definitely think looks worse in terms of quality compared to the previous one. This is no wonder, as I recorded in MP4 and rendered as M-PEG4 / H.264, thus a very fast upload time : about 7 mins for a 30+ min video, where as rendering in WMV (if my thinking is right) makes it look a little better, but takes longer to upload.....say 15 - 20 mins (hardly a big deal). I also am very limited as I'm still using Windows Movie Maker, but will be switching soon to something much better like, for example, Sony Vegas.