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Your confusing the final menu image with the bits and pieces used to make the menu
The menu must be 720x540. You make that image from text, other images, etc.
Professionals completely draw or photograph their own images, or use motion clips from their videos (or even render CG graphics). I build my menus from backgrounds I generate in Photoshop, clips from the video, scanned photos, or my own hand-drawn art. CG is currently outside the scope of my skills, so that's the one thing I don't do.
Home users generally scan, or more commonly (and often with dismal results) take images off the web. Web images need to be of decent size (at least 640x480) to not be blurry when used on a menu. Downsizing is always better than upsizing. I'll sometimes do this for a hobby project (scan a magazine cover, take an image from the web), but I try to avoid it.
Home users also often use really, really crappy templates. There's nothing more ugly than a "portrait" (vertical) image stretched horizontally to fill the arbitrary rectangle on the template. Or using a gaudy Times or Comic Sans font in a similar color as the background, and where letters are written on top of something else, where you can't read it. A good bit of what I've seen out there can only be described as a "visual abortion". Menus that look that bad should be reserved strictly for designers that have been condemned to hell, to stare at for all eternity. Quite a few homemade discs would be better off with no menu at all.
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