Help with getting high quality DVDs from AVCHD footage

Hello,
I know enough about video editing with PE7 to be dangerous, and was hoping someone could help me out.
My question is regarding getting the highest quality standard DVD from AVCHD footage. I have a Sony HDR-SR12 camcorder recording in AVCHD. I am editing footage natively in AVCHD with PE7 on a quad core system. No problem with that. However, when I export to standard DVD the quality of the video goes down drastically. (Yes, I know burning to Blu-ray would give me higher quality, but I am giving this DVD to a friend who doesn't have Blu-ray).
So far I have tried starting my project in both HD 1080i 30 5.1 channel:
General
Editing mode: HDV 1080i
Timebase: 29.97 fps
Video Settings
Frame size: 1440h 1080v (1.333)
Frame rate: 29.97 frames/second
Pixel Aspect Ratio: HD Anamorphic 1080 (1.333)
and Full HD 1080i 30 5.1 channel:
General
Editing mode: HD 1080i
Timebase: 29.97 fps
Video Settings
Frame size: 1920h 1080v (1.000)
Frame rate: 29.97 frames/second
Pixel Aspect Ratio: Square Pixels (1.0)
But I see no discernable difference in the quality of my output onto DVD.
This is where my knowledge is lacking...how can I get the best quality output from my AVCHD onto a standard DVD? Is there some format I can convert to first, and then burn to DVD? Also, I am willing to break the footage into a couple of DVDs to improve the quality, but I don't know how or what to do for that.
My footage looks REALLY great when viewing from the HDR-SR12 direct to HD TV with HDMI cable, but not very good on the DVD. My footage is of a ballet recital, and I lose definition in the faces, costumes, etc on the DVD output.
Any help is appreciated! Thanks!
Gina

Hey Gina,
This may be a year late, but as I have been pulling my hair out trying to solve this problem for the last 48 hours I finally did find somewhat of a work around, but it requires Adobe PP CS4.2.
There is a plug-in here:
http://www.mainconcept.com/site/prosumer-products-4/mpeg-pro-hd-7850/features-7861.html
Which will actually output your edit as an AVCHD file. You can then burn this straight to an AVCHD using Nero 9 and keep the highquality level of your clips and not need Blu-Ray. The DVD player will need to be AVCHD capable, but I just bought one of those for $40 as compared to the $200+ of most Blu-Ray players.
Hope that helps.
Regards,
DSW

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