Export tops off at 720x540?

I just completed my first iMovie 08 project and wanted to export to iDVD, but when I go under the Export options, the best quality is "large" at a resolution of 720x540. I burned this to a DVD and it looks very grainy. How do I export at a higher resolution? My export seems to be capped off at "large" 720x540.

The problem isn't really with the resolution, but that you go through re-rendering steps in the process. Each step slightly blurs your movie, like making a copy of a document with a copy machine. Do it once, and you hardly notice, but once you make a copy of the copy you start noticing. These steps are unfortunately unavoidable with iMovie '08:
Camcorder records at 720x480 with rectangular pixels with either DV or MPEG-2 compression -> iMovie re-renders and recompresses all frames to 720x540 with square pixels and MPEG-4 -> iDVD re-renders and recompresses all frames do 720x480 with rectangular pixels and MPEG-2.
If you use a DV camcorder, and your primary target are video DVDs, you might consider using iMovie '06 instead. It eliminates all re-rendering steps, and all but the final MPEG-2 re-compression step in the above process, and yields much better quality.
If you want to stick with iMovie '08, try exporting as a Quicktime movie using the Apple Intermediate Codec from iMovie '08. Some users on this forum have reported better results with that format.

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