I use H264 and x264 interchangably as many do. But your correct.
Yes, many people do this. I wish they would stop. :)
XVID & DIVX are not bad, but H264 has obviously passed them by in quality.
They're pretty bad. ;)
XVID is good for its speed though, so if quality is not a concern or file size you can get the job done faster.
Not true. It really depends on the settings you use to encode. You can encode videos that have a
much higher quality while encoding at a faster speed with a smaller final filesize. Depending on your CPU and settings with x264, you can get anywhere from 0.25 FPS to 1000+ FPS if you wanted.
There are many ways to approach creating videos. I use neroaacenc for creating AAC files. I use a hand-compiled 64-bit x264 (12-15% gains from it being 64-bit) directly rather than through some third-party frontend. I use a combination of mp4box and mkvmerge for importing the files into containers. I prefer matroska over MP4.
As for effects, timing, audio/video sync, I use Avisynth. It's scripting language and filters are extremely useful.
YouTube quality is still pretty terrible. For gaming videos, I prefer to use
NoobFlicks since their quality is better.
I've included some comparisons below.
As you can see in the following images, the difference between my original source and encoded source is almost impossible to tell.
In both YouTube clips, all details in the hand, ground, walls, etc. are destroyed. The NoobFlicks clips also suffer greatly in quality, but a lot more detail is retained throughout the entire scene.
Edit:
Keep in mind that YouTube will downscale 1080p to 720p. NoobFlicks keeps 1080p at 1080p, so the bitrate at 1080p will suffer some with NoobFlicks.
Original, non-encoded 1080p source:
Encoded 1080p source used to upload:
YouTube quality from a 1080p upload:
YouTube quality from a 720p upload:
NoobFlicks quality from a 1080p upload:
NoobFlicks quality from a 720p upload: