Video for windows supports 2 different modes to show up the video signal: preview and overlay:
Preview is the signal that is converted to the framerate you have selected in the framerate field.
Overlay is the original signal displayed that comes directly from the videochip.
Note:Overlay is the fastest mode to display the video signal, since the data from the video chip does not cross the CPU. Unfortunately some video adapters do not have overlay support. If this is the case the overlay mode is not enabled.