It depends on which encoder you are using, and if you are making a PAL or NTSC dvd.
In both the HC and Quenc options you are given the choices of Full D1, Half D1 and VCD. The default is Full D1, which gives you 720 x 480 in NTSC or 720 x 576 in PAL
Half D1 would be 352 x 480 in NTSC, and 352 x 576 in PAL.
VCD is normally mpeg1 352 x 240 or 352 x 288....not recommended as this will be considerably less quality.
Since you are making dvd-video (or vcd) the resolution choices are limited. By the way, NTSC is the standard for the US. PAL is used in most of the rest of the world.