IDVD Preference setting for NTSC/PAL

I now understand that DVD's encoded to NTSC will almost certainly playback in UK on modern DVD Players.
My question is this (iLife'06):
If I have an iMovie encoded as NTSC, what will changing the setting in iDVD Preferences from NTSC to PAL actually do?
Will it ..
i. Re-encode from 29 frames/480 lines to 25 frames/526 lines before encoding to the MPEG2 format?
ii. Ignore the setting
iii. Make a complete mess of the MPEG2 data?
iV. Other
Thank you!

i. Re-encode from 29 frames/480 lines to 25 frames/526 lines before encoding to the MPEG2 format?
Yes, but it does it by simply dropping a frame here and there so the output looks jerky. You get better quality conversion with 3rd party tools like JES Deinterlacer. And usually there is no point in converting NTSC to PAL because all PAL DVD players and almost all PAL TVs can display NTSC.
See also:
http://www.sjoki.uta.fi/~shmhav/SVCDon_a_Macintosh.html#PALNTSC

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I was just dozing on the bed and had a moment of clarity...
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dang itpowda, you killing me.. haha jk!
anyway, ok i see where you can be confused. hopefully this can answer yoru questions.
ok in the NTSC world, if you are creating a graphic file for exampe for TV, then you would create the file with a square pixel (PAR = 1.0 in this case) and your frame size will be 720x540 only because if you create it using the rectagular NTSC pixel, your image will look sueezed and you would have to resize the graphic anyway for TV because remember, you would be creating it on a computer monitor that has a PAR of 1.0 natively, although your DAR is the same, the PAR is not. now, when you have video in D1 NTSC, you would have a rectangular pixel (PAR = 0.9 in this case) and a frame size of 720x486.
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First thing. If PAL and NTSC both had a PAR of 1:1, they would both have a DAR of 720*540, true?
nope, if you have or want a PAR of 1:1 (to create CG files), then NTSC would be 720x540 and PAL would be 720x768.
the rest of your questions are pretty much false :P
now, you might be wondering, HOW N THE HECK DID HE GET THOSE NUMBERS!
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let me show you how i obtained 720x768 for a PAR of 1:1...
we know we want to keep the width the same, since we are creating a image file for the PAL video.
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width = 576
DAR = 4:3 (or 1.333 in decimal form)
so it would be 576 * 1.333 = 767.808 OR as a whole number 768.
how did i get the above formula:
i know the DAR of my input (from 4:3 video), i know the PAR of my ouput (from a 1:1 CG file) and i have my height from video (576). so the unknown variable in this case is the width.
so it would look something like this:
width = 576 * (4/3) / (1/1)
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w = 576 * 1.333 / 1
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