VirtualDub is effective for recording and editing video, but it cannot perform both functions simultaneously. Users express a desire for free software that allows editing of an AVI file while it is being recorded, particularly for removing commercials accurately. While technically possible to modify a disk file during recording, challenges arise due to file compression methods that require decompression, editing, and recompression. The discussion highlights that using a pause button is a common workaround, but it may not yield clean edits, especially with abrupt commercial breaks. Alternatives like Avidemux offer smart recompressing features, but the feasibility of editing while recording remains uncertain. The consensus suggests that real-time editing during recording is impractical, as experienced professionals in live webcasting affirm that such capabilities are not currently available.