Or you can do it the tough way. Load the .avi into a video editing program (I use virtualdub), do a print screen at the frame immediately before you jump back to the save state, and move back until you find the same frame and just cut out the middle.
This is what I used for the last section of my
Einhander video, because I was too lazy to do a full run (considering how strenuous the boss run was without using slowdown or rerecording). As for the recording speed, unfortunately, i'm not sure if the DivX codec accounts for intentional framerate changes (at least using ePSXe)
Edit: OT, anyone know how to configure audio recording with ePSXe using the divx codec? right now it records video perfectly for me, but for audio i'd have to record the sound through an external sound recording program...even at 100% play speed.