Video inside movie with images

I want to make a movie which has a video - 640x480, and images which are 1024x768. The result will be shown on a

screen using a projector that is 1024x768.

Currently, I'm using Picasa 3 and it does the job pretty well except that the movie ends up being either 640x480

or 1024x768. The problem is that the video doesn't look great when it is up-sized and the photos look too small

at 640x480.

What software can I use to keep the video as is and the images the size I want, as well as adding sound.