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Welcome to the forum.
With the Effect>Crop applied, and the Clip Selected, you can choose Edit Effect and then can adjust the Top, Bottom, or both. The setting is by %, and not pixels, so one does need to do a bit of math.
It seems that as soon as I drop the 1280x768 clip on the timeline, PE scales it down so that it fits vertically inside the 1280x720 frame. So I get black borders on the sides already.
If I crop the top pixels, the picture does not expand to fill the available space. So I end up with black borders on the sides + a black border of 48 pixels on top.
I managed to get close to what I want by not using any cropping, but scaling the picture up by (768/720) and then moving it down by (48/2) pixels (just above the options for setting the amount of cropping). I used the most precise numbers it would let me enter. Now the picture filled the entire viewing area with the 48 topmost pixels cropped off, as desired.
The only problem is that on the end product, it appears some resampling took place, as the text is blurry. Is there any way to achieve what I want while keeping perfect 1:1 pixel matching, i.e. no resampling?
BEFORE you bring your footage into your project, go to Edit/Preferences and uncheck the option to Scale to Frame Size.
When you then import your footage into your 1280x720 project, it should fit perfectly inside the frame, losing the few extra pixels above and below, as you'd prefer.
A bigger issue, however, is that this is a non-standard size -- which usually indicates a non-standard or non-camcorder video file. If this is the case, you're likely seeing a low-quality preview of the video, and it is appearing on timeline with red lines above your clips.
It's possible that rendering this video (pressing Enter -- the red lines will turn green) will give you a much cleaner representation of your video. However, if this video was produced by a codec that's not supported by Premiere Elements (FRAPS, for instance, or video from a program like Camstudio), you still have have some quality issues that you're not going to resolve.
Thanks! That did the trick.
The raw footage is indeed from Fraps, but so far Premiere Elements seems to deal with it just fine.