Compressing DV footage to iPod H264

I need to compress my DV-format videos to iPod-compatible H264, and I am at my wits end! From what I understand, converting to iPod format requires some special steps that Compressor isn't capable of, but since Quicktime Pro doesn't allow me to customize my iPod conversion in any way, it's useless as well. The main problem is that DV is, of course, interlaced, non-square pixel footage, which means that when it comes out of Quicktime Pro it's at the wrong aspect ratio and (probably) has not been deinterlaced.
I'm trying Podner now, but I suspect that it will have the same problems, and I have had inconsistent results trying to convert the videos to square pixel, deinterlaced DV in FCP beforehand. (And, frankly, since I believe that would introduce another level of DV compression, and I don't have the space to convert to an uncompressed format, I'd rather not introduce another transcoding step between DV and H264.)
Finally, I have a lot of video to process, so I need a workflow that isn't going to require a lot of ridiculous steps. (And no, I don't want to use the MPEG4 codec.)
So: How can I output iPod compatible, square pixel H264 video from my DV projects in as few steps as possible? Detailed information, such as a Compressor preset or workflow description, would be much appreciated.
Thank you!

Right,
So far I've found that as soon as I turn on Frame Controls, even with everything at the lowest setting the encoding performance takes a huge dive. Probably not an issue for those on G5s, but on my lowly machine I'd be waiting a week to encode 15 mins. Maybe longer. Reminds me of trying to do DVDs on my G3.
So am I ok not to use frame controls with interlaced footage? I'm not sure, but I think so as long as I resize down. I've check gone from a PAL DV sequence and the left side of the window (input preview) clearly shows interlacing when set at 100%. The right side (the output preview) shows a progressive frame. If the output is the same frame size as the input then you see the interlacing on the output as well.
I'm not sure what it is doing. Is it merging the fields as I resize down to 320x240?
For those that are performace inhibited like me the old de-interlace filter is still there, but like I said I don't think I need it when re-sizing.

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Fair enough but DV is large too. I'm trying to avoid getting back to huge files if I can but I understand that may not be possible. Is there some sort of intermediate between 1mbit and 25mbit? because even DV is overkill for the quality of footage Im talking about. Actually that's what makes this such a pain - it's such a silly, simple project that it seems insane to go through so much hassle. Not sure converting to DV would solve the weird timecode issue either but perhaps (it's been a while). I guess I was really just expecting this to be quick and easy.
I suppose with all the extra files being created DV wouldn't be that much bigger. I'm just shocked at how slow working with these h264 files was - especially when it came time to render. Once everything was conformed I didn't think it would have to re-scan (or whatever it was doing) when it came time to render.
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It goes through the process of encoding the files, all the settings are correct and I have noted the saved directory (even changed it a couple of times), and when it completes 100% there is no file to be found anywhere.
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Patrick,
We're offPatrick,
We're off to a good start...i tried that in the sequence setting.....405 x 720...however the result i got was just a cropped picture....i just tried yet another quicktime conversion filter H261....the whole picture now appears it is just squished into the 4 X 3..
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