To start off I know my video files are in 720p and I have the sequence setting set accordingly.
No, they're not. They're 1440x1080; you can see that in the project panel. Functionally, they're 1920x1080 since they're HDV. So, you should be using a 1080i/p sequence preset... or you can use a 720p preset, but you'll have to scale the footage down to fit.
A quick way to create a sequence that matches your footage is to drag a clip to the New Item button at the bottom of the Project panel; it looks like the dog-eared sheet of paper.
If you want to use a 720p sequence, select all the clips and use the right-click > Scale to Frame Size option; optionally, you can manually scale one clip, and then copy and paste the Motion effect to all the other clips.
Thanks draging the clip into the paper fold icon seemed to work like a charm. However, it lead me into another problem. As shown in the screenshot below the video files in the timeline which would be, normally, unrendered shows a yellow line above them instead of a red line. I am usually able to press enter the render the footage but in this case it just plays the video. I have noticed that this timeline is a diffrent sequence and I have tryed copying and pasting the timline into sequence one but the origional problem occured when I did this.Do you know what I'm doing wrong?