Just use the HD presets as they come with AE, so for HD 720 you need 1280 x 720 pixels, square pixel aspect. What format you use merely depends on what you’re going to do with it later on, but assuming you wanna achieve smooth playback on a computer, you should use H.264, Xvid, DivX or similar MPEG-4 based CoDecs. I would do the final compression in external tools such as VirtualDub (you have much more options there) and export only a mildly compressed clip from AE.
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