[DigMeSource] “Why is it that all the video on the web is typically 320:240?”
That’s not my experience of the web these days. Just take a look at Apple’s movie trailers. Take a look at the Flash video on CNN’s site.
One chooses frame size and data rate (and codec too) based on what you want/believe the typical viewer to have as far as internet connection speed and decoding ability.
320×240 along with “appropriate” data rate because it is a reasonable size for slower DSL speeds but that’s VERY subjective.
Your “grain” is your target. I have no problem going 480×360 at about 800kbps (may depend on actual content) in my neck of the woods because DSL speeds is typically 1500-3000kbps and Cable Modem 5000-30,000kbps.
Some areas have 384kbps and 768kbps as typical lower end DSL speeds and you make frame size and data rate lower accordingly. In such areas or targets, it’s not uncommon to use 320×240 at data rates of 200-500kbps.
Many folks choosing 320×240 may also be relying on the presets in their encoding software since they don’t understand why one might set different sizes and data rates.
If you want or need broadest reach you may make several frame sizes/data rates (and codecs).