Before trying to create a menu from scratch in Photoshop, it helps to learn by starting with one from the Encore library and modify it in Photoshop. Add a menu from the Encore library to an Encore project, then right click and pick "edit in Photoshop." When you realize how easy it is, there's no need to start from scratch. You can change everything you want to change before you can learn the small subtleties that created your problem.
In any event, as John says, PAR is the partner of the pixel size. But you have a choice to make: widescreen or standard? You don't say which you picked, so I assume you simply got it wrong. The Film & Video presets in Photoshop have a group of Pixel Aspect ratios at the bottom. The 720x480 you indicate is NTSC, so you pick between D1/DV (par .91) or widescreen (1.21).
It is possible you did it right, and Encore is interpreting it wrong, which you can fix, either way, by telling Encore which is correct. Since your menu looks stretched (rather than squished), you probably used widescreen when you wanted standard.
Try changing in Encore by looking at what Encore is seeing as the display ratio: 4:3 or 16:9. Select the menu in Encore (select the menu only,not a button), and look at the properties panel, basic tab. If is set as 4:3, change it to 16:9.