Hey Ben, welcome to the forum!
I'm not familiar with your particular workflow because I don't export to SD sizes unless I'm sending something to DVD, in which case I use DynamicLink and let Adobe take care of everything for me.
However, I do a good bit of work with stills (slideshows and such), and I also do a good bit with rendering to Vimeo H.264 presets (though I'm always using the 720pHD preset). I can tell you from personal experience that using overly large still images will give you problems, especially if you're exporting to an h.264 codec. A good workflow is typically to resize your images closer to the track size in Photoshop (it's scaling algorithms are much better than PrPro's) and then import your stills. That said, it doesn't help much when you're doing pan shots over large still images, and you need the size there... I'm afraid I've not found a good way around that limitation, short of going to AfterEffects.
I've also found that Adobe Media Encoder (AME)'s rendering from HD timelines to SD outputs is not only incredibly slow, but generally gives me pretty poor results. For that reason I always try to stay consistent with my standards--if I'm going to output in HD, then I edit in HD. If I'm going to output only in SD, then I create an SD timeline and scale my footage to match. Maybe not the best workflow, but I've found it works pretty well for me. If I'm going to a mixed output (which I often do--HD Vimeo H.264 for web/computer playback and DVD) then I do everything in the HD timeline and take it over to Encore via DynamicLink and let EN handle the transcoding to DVD for me. Usually gives pretty good results.
I just did a slideshow for a wedding last week, put it together in PrPro, output to H.264 Vimeo HD preset for my customer to preview on Vimeo, then output via DynamicLink/Encore to five DVDs and a Blu-Ray for the customer... all three outputs looked fantastic, and it was all with stills.
FWIW, since there's no good "sequence" out there for projects using only still images, I grabbed an AVCHD 720p sequence to do my edit in. That may actually be a good feature request--to create some sequences for doing still image slideshow in, that don't rely on a specific codec, but are purely built around the final output resolution and frame rate...
I'm sure Colin or Jim will jump on that last comment and tell me that there's already something like that, and I've missed it :-)
What are the full specs of your sequence, stills and output?
As I had similar questions re. still images, your detailed comments are much appreciated.
>> That may actually be a good feature request--to create some sequences for doing still image slideshow in, that don't rely on a specific codec, but are purely built around the final output resolution and frame rate...
Have you had any experience with dedicated slide show programs such as ProShow Producer? It seems like they focus on stills and have some video capabilities, while PP focus on video (obviously) and things like slideshows are pretty far down on the list.
Yeah, I had ProShow recommended to me last week while doing a wedding
slideshow. I've not tried it yet (don't want to waste free-trial time when
I've not got anything specific to do with it!) but plan to check it out on
the next slideshow I have to do. I guess I'm just tied to PrPro cause I know
it so well and I already own it... but yeah, I'll def check out ProShow next
time I need to do something.