If you're using an integrated or very low end video card that is probably the problem.
I'm using the NVIDIA GeForce GT 230M on my laptop, which is an integrated card. GFW plays absolutely flawlessly when not using Fraps - why would using Fraps (which goes on the CPU, as far as I know) load the graphics card with more?
Edit: I have no idea what it says, but choosing the top option in the top-right box in GFW's custom.exe allowed me to record an entire stage practically at a steady 60 FPS. It dropped occasionally down to ~55 when mass amounts of icing was going on, but only for a second. I might have to settle with that for now.
Edit2: Scratch the above - the
bottom option of the top-right box kept the framerate at a steady 60 FPS throughout the entire first stage, except for when the bosses went *BANG*, where it crept down to ~40 for a second or two. I'll consider that an added dramatic effect. :V
Edit3: Scratch moar - the negative bit with the second edit seems to have been a one-time thing.