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Best Codec for Digital Hi8 SD Widescreen render to Youtube

Update:11-30Source: network consolidation
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I shoot material on a Digital Hi8 camcorder in widescreen mode and can't seem to find a reasonable codec to render to for Youtube uploads that fill the screen.
When I render at a 720x480 resolution and upload to Youtube I get letter and pillar boxing in the resulting Youtube. Many of my videos are over 10 or 15 minutes long and even though I have the ability to upload over 15 minute videos to my account, Elements will often give me a warning and not allow me to upload anything over 10 minutes long using the direct to Youtube "share" function.
I've tried various .mpg and .wmv settings and have basically settled on 1280x720 as the rendered video resolution, but not only does this take a long time to render and upload as they become huge files at this resolution, but it also seems to be a waste and potential image degradation issue as it's blowing up the original video, but this is the only resolution it seems that fills up the Youtube window once uploaded.
I also tend to try to up my audio codec too since a lot of my videos are music related and like to keep the audio quality up too.
Any suggestions??

The Best Answer

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Yes, Digital8 I guess would be the more accurate and correct term for the format... I do set my project settings for DV SD Widscreen which I assume is 720x480 and confirmed with the details of clips I import when I check them in Explorer.
But when I render out to Windows Media (I've had problems rendering out as Quicktime before - fluttering of video, sync problems) so I've relied on mpg or windows media for the time being - when I render out as 720x480 and then upload to youtube, I get letterboxing and pillarboxing. Only when I expand the video to 1280x720 do I end up with a fully filled youtube viewing window. (And even then I am still getting a little black above and below the video)
I can also improve the audio quality this way going with a windows 9.2 lossless codec which I like. Downside with all this is huge file sizes, long renders, and long upload times.
I will try these settings that you provided, but won't 640x480 give me 4x3 squished video since my sources is 16x9??  Thanks for the help guys and community!
From the Share tab,  choose Computer and then QuickTime/MOV.  Choose the DV preset and then click the Advanced button.
From the settings window, do the following:
Video Tab
*Video Codec: H.264
*Quality: 100
*Frame Wdith: 640
*Frame Height: 480
*Frame Rate: 29.97
*Field Type: Progressive
*Pixel Aspect Ratio: square
*Set Bitrate: checked
*Bitrate: 8000 kbps
Audio Tab
*Audio Code: AAC
*Output Channels: Stereo
*Frequency: 44kHz
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