Sequence settings for Premiere?

When setting up a sequence in Premiere, what resolution should I use if I'm uploading to YouTube @1080 but my base "footage" (read: FRAPS capture) is 2560x1440?

All the googling I've done talks about issues related to burning to DVDs or movies or some type of super professional stuff that is nowhere near what I'm doing and gets into stuff that I either don't understand or can't relate to.

I understand that if all my base video is the exact same resolution, it probably shouldn't matter, and if I scale all the 1440 video down to a 1080 sequence, when I export it, it will look pretty much exactly the same as if I had a 1440 sequence and exported it as 1080.

However, I want to bring in video clips from other places that are either full screen captures taken at a different resolution (so far always smaller) or zoom areas to blow them up for call outs or have small clips size-scaled up or down to do different things (like talking-heads or picture-in-picture or whatever).

Nothing I do is very elaborate or important (all hobby stuff), but I'd like to do a decent job of it.

Thanks for your time and help, and my apologies if I'm being unclear.

Thanks for your time.

The fraps video I capture is basically all fullscreen gaming stuff that I do at 2560x1440. I export video to upload to YouTube at 1080p.

What I have been doing thus far is the "create new sequence from clip", which makes a sequence with the 1440p resolution. Generally this video acts as a backdrop for everything else I want to put in, like text, small video overlays and, etc.

When I reference using different resolutions, what I mean is that I may pull in other video clips that have resolutions different than 1440. These other videos I may scale up or down to fit different regions of the screen. It's mostly these other clips I'm worried about.

Then, after all of that will be done, I'm only exporting to 1080 to upload.
My concern is about resolution degradation of these other clips.

For instance, if I set up a sequence to be at 1080p, I can still have my base footage at 1440, and simply scale the video down. I did some testing and, if I don't mess with anything else, I see virtually no difference between rendering a 1440p sequence at 1080p OR rendering a 1080p sequence with the video scaled down to that size canvas.

I will try to offer a somewhat convoluted example...

Let's say I have a small overlay video that's 25x25 that I want to take up a quarter of the screen which will be rendered at 100x100.
If my sequence canvas is set to 200x200 (because that's the size of the base video), I would have to double the size of the overlay video while doing things in the timeline.
My concern is that the final rendered video (at 100x100) will make the small overlay look crappier than need be.

Again, I appreciate you guys responding. I've found the posters at MacRumors tend to be far more helpful than in other nooks of the Internet.

Jasonvp, I can't imagine the storage issues you must have. I have a 4TB that I Fraps onto and then just trash the files after I upload.

I think I'm resigning myself to the "make sequence from clip" for now, mostly because of sloth.

If I ever make a header for my videos (or actually figure out how to do nifty things in After Effects (without additional monetary investment)), I'll probably render that out at 1080 and then just use that to start the sequence and scale everything down later.

Thanks for sharing your experience.