What kind of keyboard do you have?
Have you checked for physical issues? Is the key or the contact behind it stuck?
Try replugging the USB cable of your keyboard.
Then try reinstalling the drives for it.

Just a few things you could try that require minimal effort!

Tried reinstalling DirectX?
It might have to do with a DX layer.

I agree. Upgrade to Windows 7. XP is horribly outdated and has a lot of security holes these days. You want to avoid Vista and 8, they're not optimized and the UI in both is horrible. Also, take a moment to read up on what the different versions offer. You might feel you need the extra functionality...

I don't want to nag but this has been asked before. Have a search for it.
At first, Bandicam wasn't interested in adding this, but more and more requests are coming in about it, so they might change their mind.

If I set your video on 720p, the quality is good. It's exactly the same as the other video you mentioned. ;) In case you are wondering about the letterboxing (black borders), it is because you are running your game on a 4:3 resolution. You can only get widescreen footage if you use a widescreen reso...

P.S.
Do you really need the Benchmarking function?
You can see the green/red FPS numbers. Isn't it enough?

I agree, if you need to benchmark your drives, why not download free, open-source, dedicated software to do just that?

Again, the problem is that 1920 × 1200 is a 16:10 resolution, where as Youtube uses the standard 16:9. These two ratios were in a race for being a standard for quite some time when the whole widescreen business started for consumer monitors and TVs. You either have to letterbox it (adding black bars...

...but understandable since 64-bit systems are not as widely used by many people. What?! :D 64 bit systems have been standard for years now. From hardware to software. Motherboards, processors, graphics cards, UEFI, OSes (Windows since XP!). The only stuff 'lagging behind' are some applications. ;)...

That's not the latest version of Bandicam.
Update and see if the problem persists.

Looks like an issue when playing the footage, not recording, at first sight. All the other codecs are fine? Reviewed Lagarith's settings? I have never used this codec, so I'm not sure what the right settings are. Do other computers get the same lag issue when playing the same file? What CPU, RAM and...