Haha! I've been looking at the ffmpeg all the time, but in the end I just needed to make a change to the mencoder settings! I added -vf scale=1280:720 and now everything is just fine!
Thanks for your help!
As soon as I have things up and running on my mediacenter machine I will definitely remember to donate some money! Keep up the good work!
Edit: for the SD stuff that is. The HD stuff now just goes black. I'll just need to fiddle around with it a little more.