How to convert .demo to .avi video?
How do you convert .demo video captured inside UT3 into readable .avi files?
Also, is there any compression or lossiness in the .demo videos?
Well unfortunately the last thread about converting demos has been deleted. So have to repeat this over and over again (no offense).
Generally, the file format of the recorded demo files is nothing like a sequence of images. It's a binary format. In order to play (or record) such files, you need to have all files the demos file is referencing to. Meaning: if the demo file contains a match on a specific map like DM-Bonescraper and with a custom mutator like UTCompIII, you need to have these files installed in order to play that demo.
To cut a long story short, you're not able to convert demo files.
You need to record your output of your gfx card or the most common solution: Use a capturing software.
The most used one is Fraps. There are tons of capturing sotwares, some of them are not free. I would recommend Fraps, PlayClaw, Taksi or Dxtory
Check the following page:
In all these cases you'll get a static view of a match. If you want to create a Frag movie like video, you have to capture multiple angles of the same scene and compose a video sequence of all these single recorded videos in another video-composting software like Sony Vegas, Adobe Premire (/After effects) or Lightworks. The recorded files will be very large if you're going to record the full quailty (like 1080p) without big compression.