Make sure your Minecraft resolution is set to 720 or above (1280 x 720), and then just render the video in 720 afterwards.
To set your Minecraft resolution, you can use either a program called Sizer or the Minecraft MagicLauncher. To only check what resolution you're running, simply take a screenshot ingame (F2) and then lookup the information on the screenshot in your /.minecraft/screenshots folder.
The Meaning of Life, the Universe, and Everything.
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A better solution is to look up minecraft sizer, which is a a random open source binary which resizes your minecraft window to either 720P or 1080P depending on what you pick. It's how I record in HD with fraps with a reliable resolution.
Rendering, what's that?