Load the fraps files in any video editing software you have, and resave them in a decent (2,048 bit+) format.
Or, convert them to FLV, and I can give you webspace for this, your project looks pretty cool thus far.
(Btw, tower defense?)
Edit: Oh, and the best FLV encoder I know is the one that comes with flash. It's slow, but it does a good job.