New to 16x9 format, how get best quality when using standard dv footage?

Question

If I am capturing standard NTSC dv footage, and adding standard dimension digital photos, what capture and sequence settings should I use to get best looking 16x9 output? I know I can export as 16x9 and burn a 16x9 DVD in DVDSP, but I was thinking I should capture and edit that way as well to get best quality.
Thus far, I've been editing everything as 4x3 and assuming the tv's these will be shown on will compensate, which is generally true. I would like, however, to give my clients the option of which output option is best for them.

Answer 1

So, a client would have to give me 16x9 raw footage for me to produce a true 16x9 DVD?
Yes.
I know I can't produce HD DVDs, at least not cost effectively, and most people don't have players anyway.
Right. None of us can. The movies from the store or Netflix aren't HD. HD has no current relevance in DVD production (other than as acquisition formats).
I do want their footage to look as good as
possible on those large screen tvs.
If you produce a good DVD it will look good. All the other DVDs that are 4:3 are just that - 4:3. Same with 4:3 television. If they were produced well they should look great on any screen.
1. I'm starting with DV NTSC raw footage, a low-res
codec.
OK.
2. I'm compressing to MPEG-2 to be playable on an
SD-DVD player, a further low res codec.
OK. But you really mean "to be playable on a DVD player".
3. Regardless of what I do, it's going to be
low-res.
Regardless of what you do, the resolution is limited by current DVD technology. That is, in the NTSC world, 720x480 whether it's 4:3 or 16:9.
Does MPEG-2 always look crappy on an HDTV? On a 72dpi SDTV, it looks acceptable. Is there a workaround for HDTV?
Whether or not it looks crappy is subjective. If Hollywood-produced DVDs and SD television look great on it, then it's possible to make it look great.
Your real limitations - the ones you have control over, are:
- quality of camera, glass, and related equipment
- quality of lighting, audio, camerawork, production in general
- recording format (DV ain't the greatest).
- editing format (hint: you don't have to edit in DV)
- quality of editing / editor
- quality of MPEG2 encoding
In your case I think the last one is the most relevant. If you aren't getting acceptable results you may need to learn more about MPEG2 and Compressor.
BTW 72dpi is a print term, it has absolutely no meaning in video.
Further question, if I'm doing a photo slideshow, not DV footage, can I leave it uncompressed or will it convert to MPEG-2 and stink regardless?
To make a DVD movie it needs to be MPEG-2. That's the technology we have. But it doesn't have to stink. The MPEG-2 you use is the same MPEG2 the studios use with movie releases. The technology is the same, the difference is that they have people who really really know how to use it well.
There is a way to make actual slideshows from JPEGs which play from a DVD or CD. I know little about this, but I suspect that the resolution is still limited to 720x480. Someone will correct me if that's wrong. But you don't have to put them through MPEG2 compression.
You may benefit from finding out what 16:9 really means. All it means is that the display is wider. That's all. There is no implication of a quality increase, in fact from DVD playback the 16:9 picture will always appear a little softer than SD if viewed on a widescreen device. That's just the way it is.