FCP7 16:9, Sequence settings, output 4:3?

WHAT am I doing wrong here???
OS 10.6.8, FCP 7.0.3, iMovie 8.0.6
I have to import the video from my camera into iMovie, (because iMovie sees the video to import, FCP 7 does not), which creates a MPEG 2 video 16:9 (I believe) 720x480 video. If I play it from QT, it is 16:9.
I am banging my head against the wall trying to figure out how to get that 16:9 back out of FCP! Every time I export it from FCP, it comes out 640x480 and I have black bars on the top and bottom. I believe everything is set in FCP to 720x480. If I import a 720x480 jpeg in and drop it in the timeline, it is exactly correct. But my video has those black bars on them.
The only thing I can figure is that in QT I can see the info and the video it says is 853x480. This would let me know why I'm getting the black bars, but NOT why I can not export out the 720x480.
I've tried changing the Sequence setting, but to no avail. I'd like to playback in the Sequence window in real time.
What is the easy fix?
Oh, and since the original video is in "Apple MPEG-2 Camcorder Video" is there a Sequence Compressor setting I would want to use to make it easier to edit?

Make a copy of your sequence by control-clicking on the sequence icon in the browser, and from the drop down menu choose duplicate.
WORKING ON THE COPY YOU JUST MADE:
In your Sequence Settings, you need to check the box for "Anamorphic 16:9".
Then you should be good to go.
You'll notice in your item properties, have a check mark next to Anamorphic, which flags the video to be displayed correctly. By checking the anamorpic box in your sequence settings, you will preserve the correct display of your video through the editing process.
If when you check the anamorphic box the video looks small or distorted, then click anywhere on the timeline, type Command + A to select all you clips on the timeline, then control-click on any one of the selected clips and from the drop down menu choose "Remove Attributes". When the Remove Attributes pane opens, select Basic Motion and Distort (if they are not grayed out) and the click OK.
MtD

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