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Search for "Resize" on this forum. Basically it's the concept of reducing pixels in image (downsizing) or increasing their count (upsizing, not very useful for your goal).
Originally the DVD source material is in general in the following resolutions 720x576 (PAL editions) or 720x480 (NTSC editions).
When you want to encode the video you have to sacrifice some pixels in order to obtain lower resolution which will in turn require lesser bitrate to please your eyes with fluid motion.
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