I'm trying to make the best quailty Xvide encodes but I'm not sure which video resolution size is most often used. I really don't see a difference though but I usally use a video size of 320x240. Is that too low or not high enough?
That depends on many things. For example the bitrate you are using, the original resolution of the source. Please give more info on what it is you are encoding. There is also a resulution calcuator in the xvid bitrate calculator that you might find useful. http://www.afterdawn.com/software/video_software/video_tools/xvid_bitrate_calculator.cfm
Too low and not high enough (they are the same thing) I'd say, unless that is the source resolution. The best quality, means that your output resolution should equal that of your input. As said though, it does depend on the bitrate used. The filesize you are aiming for may be too low to support a higher resolution.
Remember that too low resolusion can indice to 'pixelation' , if you look that AVI on a big monitor. 320x240 will produce a result comparable to VCD, and if the movie were DVD-like will decrease its quality. On our 'DVD to AVI guide' we suggest to use a size of 16*N x 9*N for a 16:9 movie, and 4*N x 3*N for a 4:3 movie. If you use an already made movie (like a WMV, or a MPEG), just keep its resolution. Raising it won't have effects. Lowering it will generally (unless the AVI already were lousy) lower the movie's quality. Remember that the 'bitrate' used by your codec is 'distributed' through the pixels, therefore making a 720x405 AVI will not make a better job than making a 640x360 with the same bitrate (e.g. 700 kbps).