Trouble with output size using different packages/codecs

[jesario]

I am rendering through WMV 9 codec and I have MPG video in my timeline that is 720x480. After I render, all my titles and overlays are not right (too wide), and the video that was in the timeline seems to be reduced making a frame. But I noticed that certain codecs affect the output, and this doesn't always happen. Here are a few of my questions (thanks for your patience):

Does each codec operate differently with the size I specify? How about the project properties, mine is set to default 720x480, but any smaller size video in track one is full screen in the preview, but not in the overlay track, why? How do the titles and overlays resolution get specified?

Thank you very much.