Why are my square pixel images squashed?

I'm going to be creating some artwork to add into a pal ae comp but I don't understand what ae is doing to the file when I import it in??

I'm creating a peice that will eventually need to be output to PAL television standard so I'm creating a comp with the PAL D1/DV Preset.

I've been told not to create artwork in the same size as pal (720x576) because it will be in square pixel format... so I've been creating my images at a resolution of 800x640 (the same aspect ratio) with the intention to simply scaling the image down in ae.

However when I bring the image into ae it squashes the image?? I don't understand the logic here? I thought ae was supposed to compensate for the whole square pixels issue as long as the files were tagged correctly?

I'd really appreciate any advice on this subject as I'm panicking a bit to finish some work! :(