I seem to be fixated on the topic. Early web videos was was 160x120. Yes, postage stamp videos. When I started shooting web video users were on 56k modems. The largest size we could use was 320x240 to upload video. All of those videos were in the square 4:3 aspect ratio.
Time marched on and soon entry level broadband spreads throughout the land. Folks started transitioning to 640x480. Then came the standard definition wide screen camcorders. Then voila, high definition camcorders.
That was fine when the user could make the decision on what size to upload. The problem is now most of the web hosts now are formatting their presentation screens for high definition formats.
What about all the prior content in various sizes and formats?
What about the functional camcorders that shoot in 4:3?
What do we do about prior content that might need to be re-fitted to the newer display formats?
This is another explanation of aspect ratio in plain English. The video is from Iceflow Studios TutCast. It is a little dated since YouTube has moved to even larger display options but it is still good.
I have about 300+ videos and more to come. For me, I need to consider making new choices about what standard size I'll be using to upload my videos. On the blogs it won't matter that much. I have a standard size that I use to fit my blogs format.
However the video hosts that I use also distributes my content to other places like the Internet Archive, Yahoo, iTunes and other content distribution points. Each has a preferred format and it is a safe bet they are using high definition/widescreen.
There isn't one answer. It depends on your equipment and needs. One way to think handle this is to be consistent.
If your camcorder records in 640x480 ----> Edit in the appropriate 4:3 aspect ratio ----> Export 640x480 No distortion or squished video. Viewers may see pillars on the side. That is ok so long as the video is correct.
There is a second option:
If you camcorder records in 640x480 ----> Edit in the appropriate 4:3 aspect ratio ----> Export 640x360 This will give the appearance of wide screen, no distortion. When displayed viewers will see the top and bottom letterbox bars.
Same idea for high definition camcorders. Record in 1280x720 ----> Edit in the appropriate 16:9 aspect ratio ----> Export 1280x720. You will have no problems because the video will fill the screen. Same concept for 1080p.
Unless the web hosts has moved to a higher aspect ratio. And they have. And the will. Once you understand how to do it you can adjust for any future changes in display size.