Creating PSD file menu in photoshop...resolution is really bad!

I am creating a 16:9 menu in DVDspro 4 (PAL), I have created the flat PSD file in photoshop with elements from Illustrator that have been brought into Photoshop... at 72dpi RGB - PAL D1/DV Widescreen 720x576 preset.
Now the graphics look pretty pixelated and when I bring them into DVDSpro they are worse and stretched vertically cnat seem to get them to fit my Letterbox format or even look ok in the Simulator.
Now ive read in the DVDspro 4 Uses guide about square v Rectangular pixels,
but my graphics look so bad, can anyone help me? Should I be setting the resolution differently?

I do it like this (I know you can bring in layered Photoshop files into SP but this was the workflow i adopted when using sp 1.5 and it has always worked). This is for PAL work
For 4:3 screens I have a standard template at 768x576 which has the Action Safe and Title safe indicated on a switchable layer
For 16:9 screens I have the same only at 1024 x 576
These are at 72dpi (though this is basically irrelevant it's terminology if you are from a print background you'll understand - it also makes the files nice and small)
I then create any elements in Photoshop that I need. IF I am bringing in any logos etc from Illustrator (which appears to be where you are having the problems) I open the Illustrator EPS in Photoshop but at 300dpi. I then drag that 300dpi image into the menu file (which means it will be huge...) and resize from there. This may be why I don't get problems with Illustrator logos.
From there I save out the completed logo as a PICT file and the overlay layer(s) for creating the simple highlights in SP as separate PICT.
Newer versions on SP handle the resizing of your widescreen or 4;3 menus to the appropriate 720x576 sizing (though I have found with motion menus at widescreen it is best to save out as a 720x576 m2v, but that's another story)
I suspwect the main problem you are having is that you are either cutting and pasting your Illustrator file (which is therefore immediately 72dpi) or you are opening the file at 72dpi. By adopting the method I use hopefully this will allleviate the problems
Let me know
Steve Kirkham

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