A Super VCD (SVCD) might be an option for you, provided that your friends and family have a player. The SVCD standard is still only 480 x 480 in NTSC and 480 x 576 for PAL, but it eliminates some of the scaling artifacts you're noticing.
Another approach is to use DVD. Its higher-resolution format—720 x 486 NTSC or 480 x 576 PAL—is still smaller than your computer's screen resolution, but this now takes advantage of all a standard TV can handle. The drawbacks are that DVDs require software to author the disc and need to be played on a DVD player or a computer's DVD drive.
Q) Is there an optimum aperture to use for composing landscape images with a digital camera?
A) The aperture is a camera setting that adjusts the amount of light reaching your image sensor. The aperture, measured in ƒ-stops, is controlled by the iris (a part of the lens with a variable opening, just like the iris in your eye). A wider opening of the iris is represented by a smaller ƒ-stop number, so a set-ting of ƒ/4 would have a larger opening and let in more light than an ƒ/16 setting (a larger opening also is called a faster aperture).
Before deciding which aperture to use for landscape images, you must consider depth of field, which usually is defined as the distance from front to back in which the objects in the scene are in focus. In reality, there's only one plane that's in focus, but the depth of field is the range in front of and behind that focus plane that's acceptably sharp in a photograph.