Making the move to 16:9, but totally confused about what settings to use!

Hi, It seems to me that since all new TV's being sold are wide-screen, it is time for me to stop making videos in 4:3. But I am completely stumped by the procedure to work in 16:9. I have shot my footage in standard definition, 16:9. The final product will be a DVD created in DVD Studio Pro. I would like the picture to fill a widescreen TV, and.... when played on a 4:3 screen, I would like it to fill the width of the screen and be letterboxed on top and bottom.
I think that I am correct to capture this footage into Final Cut Express, using Easy Setup, and choosing 'Anamorphic'. At least that gives me a 16:9 screen in FCE.
But can someone tell me what settings to use in DVDSP when I when I import that video? I tried to import Anamorphic video into DVDSP, and went to Preferences, and chose 16:9 Letterbox. I got a wide screen, but my footage came in as a squished 4:3 image. I'm totally at a loss, and would very much appreciate any help you can give.
Thanks very much, Bob

Yes, Anamorphic is the Easy Setup you'd want to use in FCE.
When I say it's distorted, that means anamorphic is recorded to tape squished (much like how it imports into DVDSP for you) and that the format demands being unsqueezed during playback. Sorry, if I scared you.
The encoding settings are also available in DVDSP's Preferences under the Encoding tab.
Also - and this is the single most important element of this workflow - in addition to setting the default Display Mode to 16:9 Letterbox, be sure to confirm that this is not overridden (for whatever reason) after you've placed your clips onto a track. So check the Inspector and make sure Display mode is correct. (It's been known to happen once in a blue moon and, if not readjusted, will mean that your DVD will not display correctly on any proper setup)

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