If you're using D2SRoba then final resizing should happen. On my D2SRoba form I've got all the boxes checked, specifically those that mention sizing. I notice in the guide it says to uncheck the transcode box ( as if it's too big we can run Shrink afterwards). This is clearly the problem area. Check the box & resizing will be done for you.
What have you got set for audio in DVD2SVCD? I set my bitrate to 384 so that I retain enough space for my AC3 sound. I either use the AC3 audio in the avi file or convert to AC3 within DVDLabPro.
In the CCE tab I have unchecked the "Calc. bitrate as max" box. Don't know why but I'm going to try it with this checked.
I see what ChickenMan is doing with his settings for sizing. Let's get the maximum video quality , add the sound and if we need to reduce the overall size then we shrink it , otherwise if the sound was smaller than we expected then we've gained video quality at no cost. Like it.