Premiere EL 11 - project initial settings question

Hi,
Properties of the recorded video (by a JVC handycam) are as follows:
- AVC 720 x 576 pixel - 16:9 - 25 fps - PAL - 8 bit - Interlaced - Bit (poxel*frame) 0.558
Properties of pictures I wish to use are:
- 1944 x 2592 or 2592 x 1944 - 300 dpi - 24 bit similar resolution bigger or smaller
In the past in order to keep the Aspect Ratio 1:1 so that pictures in the video would display properly 1:1 mixing video and pictures I created a HDV 720p 25 (1280 x 720 25 fps PAL) project.
Once playing the DVD on a TV I was able to see the pictures not being distorted and the video fine.
On the contrary, what I was told was to set the Premiere EL project with the same video source properties, but if I wanted to insert a picture I would have had problems (PAR) and needed first with Photoshop EL to save a picture from squared to round pixel, something I do not know how to do.
I know about the PAR (which i really hate) and this is why I am asking the quesiton.
Q1. I wish to create a video project for a DVD 4.7GB. Obviously, the video will be PAL and 16:9. Wishing to include to the video some pictures. What do I have to choose as the initial project to work on from Premeiere EL when starting the program?
Please see video and picture specs above posted.
Q2. Also, any way to learn how to confert a picture with Photoshop EL 11 from square to round pixel?
thank you,
Spiro

Spiro
For the still import in Premiere Elements where you want to perserve the transparency in the image after it is imported into the project, I would go with .psd or .png. I would probably go with the .psd for that. As for non transparency related images, I would prefer to go with the JPEG highest quality. The use of the larger file size PSD is preferred by many who cite JPEG degradation issues. In the absence of repeated Save As, I am not running into that issue with my choice of the JPEG image.
But, my questions to you now are not meant to get into the back and forth between JPEG vs PSD. For now, I wanted to suggest a generalized workflow to accommodate your 16:9 project and your 4:3 still images.
Open your Premiere Elements 12 Windows project
File Menu/New/Project
and set the project preset to PAL DV Widescreen.....
before exiting that area, put a check mark next to "Force Selected Project Setting on This Project".
Next, in the Premiere Elements Expert workspace, go to Edit Menu/Preference/General with its option "Default Scale to Frame Size" and remove the check mark if there.
Then, since you have only a few photos, import your photos as is into the project using the project's Add Media/Files and Folders/Project Assets. Scale the image for each to fit the Edit Mode monitor space provided by the project preset set.
You can do this
a. By clicking on the monitor and using the handles of the images bounding box
or
b. Selecting the file, going to Applied Effects Tab/Applied Effects Palette/Motion Panel expanded and its Scale property (with Constrain Proportions with check mark) and using the Scale slider for the scaling.
If your videos are 720 x 576 16:9 @ 29.97 interlaced frames per second, just import them.
What does the rendered Timeline of all of that look like? Is your Premiere Elements 12 overall performance degraded by any of the above?
There are all sorts of variations on all this and differences of opinions, such as jpg vs psd, cropping/resizing (IrfanView or other) or not before import, etc. But, let us see what works here with Premiere Elements 12 in a Windows 7 64 bit provided with adequate resources to support the project.
We will be watching for your results.
Thanks.
ATR

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