Try scaling your high resolution images in photo editing software before adding them to your PRE menus. Scaling algorithms in photo editors are usually much better than those in PRE. DVD resolutions are 720x480 (NTSC) or 720x576(PAL) and Blu-ray 1920x1080.
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I want to use Adobe for progressive DVDs if they can get the menus to look decent.
I just wanted to make sure that you were talking about AVCHD format burned to DVD disc and not DVD-VIDEO on DVD disc.
All the Premiere Elements 12 burn to have 29.97 or 25 interlaced frames per second frame rates except two under AVCHD DVD, both with 23.976 progressive frames per second frame rate
H.264 1920 x 1080p NTSC Dolby
H.264 1440 x 1080p NTSC Dolby
We aware that the project preset selected to match the properties of your source media will direct the program as to which version of the disc menu .psd sets to make available to you s, w, hd.(standard, standard widescreen, or high definition).
All the s and w psd sets are at Image Size 720 x 576 whether the project is NTSC or PAL. The hd set is typically 1440 x 1080. More on that another time. What is the original pixel dimensions of these photo inserts for the disc menu? What version of Photoshop do you intend to create these menus in?