4:3 & 16:9

My camera is set to record in 4:3.Have double checked this. I set my audio/video settings to dv pal 4:3 and my sequence to the same. When I log and capture and load my clip into the viewer the picture seems to be 16:9. Grey bars underneath and on top. When I try to load the clip to the timeline I get the message
For best performance your sequence and external video should be set to the format of the clips you are editing. Change seq settings to match clip settings? yes/no
Any ideas about what I'm doing wrong??
cheers

When I try to load the clip to the timeline I get the message
For best performance your sequence and external video should be set to the format of the clips you are editing. Change seq settings to match clip settings? yes/no
Select yes, FCP is probably following directions from a previous Easy Setup (FCP main menu>FinalCutPro>Easy Setup).
G.

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