TMPGEnc 4.0 Xpress is an excellent video editing software, that has tons of features, sadly its not freeware but you can get it as a 14 days trial version at their homepage.
The pay version costs arround 100 dollars
Here i will guide you threw the process of converting to DivX, a format that works better on Youtube with their encoder.
The opening window, choose to start a new project.
Now this page shows up, here you choose to add the file you wish to encode
In this window, choose where the file is located you wish to convert and push Open
Now you get this screen, just choose OK, since you only want to convert and not edit it.
Now this screen turns up, here you choose Format
Now its time to choose the type of video you want to encode to, in this case
DivX after that has been chosen, click on Select.
Now comes the tricky part, the settings for the DivX file. To get the highest quality on it, use these settings:
Level: High quality (High Level)
Aspect ratio: Pixel 1:1
Frame rate: 25fps (Interlace)
Performance: Best quality
Rate control mode: Multipass
After these settings has been done, choose Encode
Now this screen comes up, its time to choose where you want the DivX created to, after that is done, choose Save
Now you are almost finished, now its time to start the encoding and thats it.
It will take some time to convert your video file to DivX. It all depends on how much power your computer has.
But when its done, you will have a DivX video file that does not take up much space on your hard drive, that is in great quality and that can be uploaded at converted much faster at Youtube.