This makes sense Dave. :-) Photoshop is my tool of trade, but I am brand new to AE. And to answer your other question about animating or scaling, I would indeed be animating my design's position.
Let me give an example of a company that designs all their products in photoshop, brings them into AE and then animates them. Their video, VWM, MPEG1, or MPEG4 no matter which format is crisp and clear and they use the following settings:
http://powerpointsermons.com/_Candle_Light_Service_b-7753.html
"This Motion Background "Candle Light Service" is a full DV resolution (720x480) at 30fps (frames per second), so they'll look crystal-clear on TVs, projectors, and even the web. Additionally, we guarantee that "Candle Light Service" will be compatible with any worship software program. You can download "Candle Light Service" in the three major formats: MPEG1, MPEG4 or WMV. "
If I want to animate, say something similar to the example I gave, what format, size, quality should I be using inside Photoshop before bringing it into AE to retain the same crispness they do in their example ?