Need high quality compression for iDVD but don't want letterbox

I have a FCE project which has moving stills, lots of titling and graphics (from Photoshop) and want a high quality compression to get rid of the interlacing, etc. I need to get this to iDVD.
If I export as quicktime, it's just ok quality. If I use Sorenson or Animation (as recommended by the Apple creatives), the resulting project looks great but I have letterboxing on the top/bottom in iDVD, which I don't want. I'm using a 4:3 aspect ratio and my FCE project is 720x480.
What am I doing wrong? I don't have the "preserve aspect using letterbox" checked but get the letter box anyway. (I tried it with this and have a thicker letterbox!)
Thanks.

If the material is 4:3 edited in a 4:3 there is no reason for iDVD to letterbox it, unless the iDVD preferences are set to widescreen.
It's hard to tell where you're going wrong because there are so many variables along the way, and you haven't spelled out what you're doing, format, frame sizes, export settings, etc.
Whoever told you to export to Sorenson or Animation is completely wrong. You should export to QuickTime Movie. iDVD only accept a couple of formats DV material and HDV in Apple Intermediate Codec, and HD is always widescreen. The HDV 720p format has no interlacing. These formats export from FCE with interlacing unless you switch it off in FCE. You can do this in Item Properties for the sequence. Set the Field Dominance to None.

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