Download fraps from http://www.fraps.com and install it.
The program will appear in your task tray. You can set it up to record and stop recording on a certain key. Basically you just press it ingame to record/stop
The avi files fraps uses are uncompressed and are HUGE. But dont worry. Pop open movie maker and you can slice and dice it into clips, add fading and small effects to your movie. When saving out the file there are quite a few formats moveimaker will save out to. Can't remember of the top of my head which is best though for compression/quality. Some experimentation might be needed there to see which is best for your movie. (i.e if you have a huge movie, you will need to sacrifice quality to try and get the file size down).
If you can afford a copy, then I would highly recommend Adobe premiere, but I don't think anybody is mad enough to buy it just for making Daoc movies