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Its in general preferences. And you may also alter it per clip with the right click menu.
That's the problem.. this option was always showed under the custom settings tag in the general preferences, but it doesn't show up now.
Sorry, just found it!!! it's in a very deferent place than I was used to.. thanks for your help
It works a bit differently in CS3 compared to 1.5.
In 1.5, the setting was applied when moving a clip onto the timeline, so could be changed between instances to get different results for the same clip in a project.
In CS3 the setting is applied during import and cannot be changed for a clip once imported. Full resolution is retained, but instead of 100% scale in Motion referring to the original frame size, scale is re-datumed to be 100% at project frame size. As far as I am aware, that is the only effect of applying this option.