I think that you should increase the resolution a bit more than that perhaps to 640.

See this series
800x450 YouTube - Test2 WMV 800x450
640x360 YouTube - Test2 wmv 640x360
320x240 YouTube - Transcoder test 2 wmv 320x240

But for perfect results, here is the tutorial on how to bypass the Youtube re-encoders using iTinySoft Total Video Converter 3.10
YouTube - How To: Upload Lossless Quality HDV Videos to YouTube
There are disadvantages of this method - such as you will need to press pause to allow the video to download before pressing play - but the quality is amazing.
See
YouTube - HD Encode example for Youtube