Man, that looks great! At home I need to sit closer to the TV, or get glasses... I've been missing out on a lot of detail.

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Hokay! I wanted to actually give this some time so that I could write a proper response!

First, the good stuff: the quality of your capture is great. Most importantly, it looks like the blacks are at the right level; not too dark (which could cause large portions of the image to “pool” together in dark areas like this) and not too light (which would leave things grayish). I find that I usually have to play with the gamma settings on my card to get this right, but your video looks good!

Now, the improvements… Here’s a screenshot from MediaInfo, an app that shows all sorts of good information about video files:

First and foremost, you’re recording at 60 frames per second. For some games with true 60 Hz output (like Halo 5) you might find some benefit in recording at 60 fps, but Destiny is locked at 30 fps which means that you really just have duplicates of every single frame. For Destiny this is overkill, so I’d recommend changing your card to use 30 fps. That will help with the file size quite a bit and it’ll make editing the files much simpler later on should you choose to do so.

Second, your video bitrate is 40 Megabits per second! For comparison, most Blu-ray movies float around the 20-35 Mbps range, depending on the amount of grain and fine detail in the original (animated content uses less, film tends to use more). Destiny has a little bit of fine grain thats worth preserving, but for the most part you’d actually be pretty well-off scaling that down to 20 Mbps during capture. For final export, you’re going to be fine with 8-10 Mbps.

As a test, I re-encoded your video at 8.6 Mbps and 30 fps (click this link, and then click the Download button at the top left of the window to download the actual MP4 file instead of viewing it scaled in the browser).

As you can see, you certainly lose some of the finer detail (it’s inevitable), but the video still looks pretty good and the important parts of the frame are still very sharp. And the file size is a fifth of the original (~170 MB)! For the most part, I think this quality would be very acceptable for sharing (and if you decide to upload files to YouTube, they will crush it even more than this, unfortunately).

Direct comparison of the videos is tricky, but I pulled one of the more difficult frames (one with lots of grain noise, dark colors, fine texture, and whole-frame movement) from both videos so that you can compare the original to the 8 Mbps version in a “worst-case” scenario: Frame Comparison (PNG, 2.5 MB) (Be sure to view that at full-size, not scaled!).

As for your last question, recording party chat is kind of a pain in the rear and I don’t have any good advice for that yet. I just ordered a funky chat cable that should help with this, but it won’t arrive for another day or two so I don’t know how well it works yet. I’ll report in again once I get some hands-on time with it.

Final takeaway:
If you have the hard drive space to spare, I’d recommend recording at 30 fps and the best bitrate you can, but then you should edit down and compress the files before sharing online. If drive space is an issue, you can scale the recording quality back to 15-20 Mbps and it should still look pretty darn good.

Hope that helped! :)