How do I optimize my computer to record a video in virtual dj using ffdshow

Here's the deal. I have a Mobile Intel Pentium 4 running at 1.8ghz with 512 megabytes of ram. I installed ffdshow encoder for recording with Virtual DJ, but I dont know what settings to set the recording at and there seems to be a lag at the beginning of my recording. I have one song on one side and a video on the other and I have even closed the video window to reduce memory usage, because I can still see a preview of it in the deck. Note: I have closed several programs and closed browsers such as Chrome or Internet Explorer.Help please!

Is there a better encoder out there that uses less memory