Well, Youtube will take almost anything these days. You can give it a .MOV, .MP4, .AVI, .WMV...
I got my start using Camtasia Studio to edit videos, but didn't find that to be especially great, so I moved to using Windows Movie Maker. Got frustrated with its limitations and a friend was using Vegas, so I gave it a shot.
If all you're looking to do is recompress FRAPS recordings, you could just use VirtualDub. If you want to do the overlays and stuff like I was doing in my video, then yeah, I guess Vegas would probably the the bare minimum there.
A word to the wise: Vegas will try to scale your video to whatever your project settings are. If you give it a 60fps video and export at 30fps for Youtube, it'll try and blend the framerate down to 30fps, which causes ghosting:
What you're going to want to do is right click the video on your timeline, go to properties and make sure "Disable Resampling" is selected.
It's a huge pet peeve of mine but it looks way better in my opinion. You'll have to do it for every individual clip on your timeline, though. I don't know of any universal setting to disable framerate resampling across an entire project (and I wish I did).
Of course if none of this bothers you then whatever :Y