Before encoding avi files to DVD there is a setting which asks for wide screen or 4.9 I believe, which one does a person select, if your movie is a 356x235 resoltion to you set that also or always set high resolution in DVDSanta?
If you have a regular tv, 'full screen' would be nice. But if you have a wide screen tv (16:9), then set it to wide screen. And if your dvd player or tv has settings to adjust the screen mode, really doesn't matter.