hmm I'm such a newb

I was just playing around as it's getting late but I changed the "Aspect Ratio" in the "Video" tab on tmpgenc to 1:1 (vga) and now my output actually has the correct 352x480 aspect ratio. Is it ok to do this, or should I leave it on 4:3 ? Because when I leave it on 4:3 it resizes the output and gives me a 4:3 aspect so it's not 352x480 of course.
Also when I test the video on windows media player 6.4 the video has the correct 352x480 size now, but it looks very squished as it should for a resolution of 352x480. But is this normal and will it playback normal on my dvd player after I make the cvd? Thanks