Hi Carey,
Everything hat you send to YouTube is re-compressed.
You need to send your pictures the less compressed that you can.
If you know that the size in YouTube is 640x360, do it that size.
Try H264. data rate 700Kbps. Set Key Frames : Automatic. Fields Reorder, Two Passes. Fraames Per Second, as your movie.
Set the audio AAC 128 or 96 Kbps.
Sure will look great in your computer.
Rafael
http://www.nagavideo.com