It took me a couple of days too figure out and now I have the answer. I never thought of just searching it up or using Youtube (WTF!)...
Note that I'm using the Sony Vegas 8.0 Movie Studio (cheapest / simplest one available at the time).
Before and after:
Step 1: Step 1: Get the Footage
Record, for this Instructable to work it has to be at 640 by 480 or 720 by 480( Anything less then 1080 by 720), unless your in non-NTSC (America) area like the UK (PAL video format) or if the footage is in HD, in which you would just search it up or use Youtube.
Step 2: Step 2: Resolution Change
Click on File, then Properties. Change the Frame width to 640 by 360(360 = bottom one)
Step 3: Step 3: Apply New Settings
Apply the video to the time line and right click on it. Scroll down to "Switches" and uncheck "Maintain Aspect Ratio".
Step 4: Step 4: Done / Render Video
You are now finished. Now render the video and upload.