Anamorphic 16:9 Squeezes to 4:3 - Apple's solution...

A Movie imported and edited with FCE from a Anamorphic 16:9 DV Camera cannot be imported into IDVD '09 without squeezing the image into 4:3. Apple's work around is to export the file from FCE as a 854x480 instead of the native 720x480. This seems to work so far except my question is... does changing the aspect ratio before exporting like this degrade video quality of the final DVD?
Any help would greatly be appreciated.

OK. More information as a result of working with this some more.
There are several disadvantages to following the steps in the KB articles listed in my earlier post. They are:
1) You will lose all Chapter information that you placed in the sequence while working in FCE/FCP.
2) You can't use the export as QT reference movie. This requires extra time (CPU and wall clock) and extra disk space to hold the large resulting files.
3) By doing one more full export, you introduce the possibility of reduced quality in the final product.
4) I didn't test this but I would expect that compression markers get lost too.
I did find one way to to using the QT reference movie with Chapter information. Following is the information on that:
1) Export the sequence as described in the FCE/FCP manual to get a QT reference movie including Chapter markers. (A reference movie is usually a lot smaller than files resulting from the KB articles.)
2) Open the new QT reference movie in Quicktime 7 (may need to reinstall this if you are on Snow Leopard - search the internet for steps to do this).
3) Once the file is open in QT 7 (NOT QTx) then select Window / *Show Movie Properties*.
4) Select the Video Track and the *Visual Settings* tab, enter 854 x 480 in the *Scaled Size* and UNCHECK the *Preserve Aspect Ratio* option.
5) From the File menu, save the movie (I used the Reference Movie option).
6) Drag this new file into your iDVD project and things should work as expected - Chapters and all.
Bottom line, Apple does not have a clean solution (as far as I know) to a 16:9 workflow between FCE/FCP and iDVD. If you think this is important, please provide feedback at the following site:
http://www.apple.com/feedback/finalcutexpress.html
The feedback should include a request to have a better 16:9 workflow from FCE --> iDVD.

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