HUGE PROMLEM WITH PREMIERE EXPORTING TO YOUTUBE! PLEASE HELP!

Sorry for the intriguing title, but I need to get your attention about my huge problem.
Hey, My name is Luke, I am the editor for an independent film group called unclekornicob. We are Teens who love making videos and short films, manly for Youtube. www.youtube.com/unclekornicob
We just upgraded our software from the Adobe Production Premium  7.5 to Adobe Production Premium CS5.5, manly for the Premiere Murcery play back engine, and the sweet new effects in after effects. But above all, we were SO excited to have our productions look sharp and clear in full 1080p, that takes up the full youtube video screen.
We use a Canon T2i (550 D) and the file format doesn't work the best in Adobe Premiere. So we use Adobe Media Encoder to change the .mov file to an AVI, which really helps the playback in post production.
But, when it comes time to render, we get stuck. We use the H.264 format with the "Youtube Widescreen HD" preset. It renders out smoothly, but uploading to youtube is the problem. It is SO nice how fast it uploads, but while watching it, theres 3 problems,
1. There is a black box around the video, making it small.
2. Its not in 1080, is just in 720
3. Even in 720p the quality stinks, and we cant have that.
Please help, we are really stuck, and we want our productions to be perfect.
Thanks!
Luke

Yeah, I was hoping you wouldn;t say that!
This really helped though, switching the play back resolution help it alot, but still not good enough to edit on. Sorry if double posts are frowned upon.

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