1. Use DIVX or XVID avi files... these codecs usually produce the most color and resolution in a compact size.
2. Use MP3 encoded music/audio for the background of your video... like DIVX and XVID are the best formats to use for video, MP3 is the best for audio.
3. Make the resolution of your video 320 x 240... For the new wide screen format, use 640 x 360... This way, you will ensure that your video looks good in this resolution before you upload it to YouTube. If it is any larger, YouTube will modify your video to this resolution and the resulting video may downgrade because of the conversion process.
--for best and easy editing....
use windows movie maker (included in your windows machine)... it can help you make beautiful slideshow or video clip(e.g. mixing your songs with pictures/video/etc).... then save it as video file such as wmv file format... finally upload.
or .. Just get those clips you want , save & convert them, and then mix/match with pix/sound/etc using windows movie maker to create new masterpieces....
this will help you.... Use 'zillatube'. This is the easiest (and also the fastest) way.
Zillatube produces mpg/mp3 formats from youtube that are compatible with windows movie maker(or media player), and more.
It is very easy to download and convert videos. Then edit those converted mp3/mpg videos with windows movie maker... save your file as wmv and then upload.
It works very well....just google search for "zillatube"