Looking for some general help in regards to converting files for playback on the GM minivan PhatNoise system.

I've used FairUse Wizard to covert files over to DivX (should I use XVid instead?), and the resulting files do not fill the entire 7" screen in the vehicle.

PhatNoise notified me that the screen supports 740 x 420 (16/9) (I think this is right, don't have the manual in front of me, but it's close). Anything smaller will result in the image smaller than the screen, anything larger will not play!

When using FairUse should I:
(a) crop the video to only capture the actual movie image?
(b) select the largest "preferred resolution" for the output video? This never seems to get too the 740 pixel width of the screen, but close.
(c) what about the anamorphic check box? when do I check that? Based on the original movie aspect ratio I guess, but what?
(d) HD resolutions? Should I check that for more options, but stick with "prefered" options too?

Thanks! Need to get this clear for all the "soccer moms" who will soon be on the boards with these same questions!