OK, I don't know what the hell hapened. Now it works!!! All I did is recompile. I did get a larger executable though. Now FRAPS issues have fixed themselves without any intervention. Under DirectX. I'm not touching OpenGL with a ten foot pole today!
And I added a single line of code, restricting animation update to only high LOD objects and now it is fast enough for this laptop!
So disregard what I said in last post as simple growing pains for the engine. Except for my dead PC. Still dead...
There is one strange bug though that I only experienced on my laptop: shift-clicking does not register.
Here is a completely unscripted video showing creation mode in first person mode (sans the nifty shift click commands):
PS: I just can't believe the mesh memory display. It is way too low. It must be bugged!