What software is used to create the videos you see on SimTube? I presume some sort of .avi capture then conversion to Flash?

Isn't it FRAPS?

Fraps is often used to record the footage, and uploading them to the site converts them into flash movies for the special player.

We usually use Fraps or Game Cam to record with, but use a combination of FSRecorder (free), walk-and-follow, and or the F1 view utility to get the nice angles; then use windows movie maker (free)- or the really good makers are using Sony Vegas or similar for editing/rendering the final compilation.