Offscreen stuff causing lag

Per-pixel collision detection is a pretty intense thing. Once you have thousands of objects to test, it can take a lot of time to check every pixel.

Don't worry about it, though - in practice it's not often you'll encounter problems with it, and as you said there are ways around it. I have a demo of a shooter where there were about 500 objects on screen and collision checks between almost all of them and it ran fine on a pentium 3.

So it depends on the amount of objects? Not the area for testing. So when i make my level i should resize the collision masks as much as possible instead of placing out 32*32's on a grid?

No, it is the area for testing, I meant the more objects you have the more pixels there are to check. As far as I know, using 1 big sprite that has the same surface area as multiple little sprites will take the same amount of time to check.