Hey guys,
I see this was posted back in 2007, but I was struggling with the same issue today in 2014. Just incase anyone else runs into the same problem, here’s what worked for me:
If you’re creating your Encore menu in After Effects, BEFORE you export to Photoshop (COMPOSITION > SAVE FRAME AS > PHOTOSHOP LAYERS), what you want to do is make sure you double-check your Pixel Aspect Ratio under composition settings (COMPOSITION > COMPOSITION SETTINGS).
I had set my pixel resolution to 720 x 480, but the aspect ratio was configured for D1/DV NTSC when it should have been set to D1/DV NTSC Widescreen. Things weren’t matching up in Encore because of this oversight. After I fixed it and re-exported, that error in Encore disappeared.
You might not be working with Widescreen, but the same principle applies. Just make sure your pixel aspect ratio for your exported menu matches the pixel aspect ratio of any rendered assets (for example, button transitions).
Hope that helps,
Amy McClung
Blue Wave Productions, LLC.