Placing background movie/project settings

I am lerning Livetype via a lynda.com tutorial. It says that if I'm using DV that my project settings should be set to DV NTSC 3:2, however my footage is shot in 16:9. What setting should I use. Do these settings only affect the placement of my type or do they affect the quality as well?
When I place a background movie that I exported from FCP and I use the DV NTSC 3:2 setting the picture is squeezed as I would expect, however, when I swith the settings to 1080I 16:9 the movie just occupies the upper left corner of my canvas. What am I doing wrong?
Thanks in advance!!!!!!

Hopefully I am not leading you astray here. Try using the NTSC 3:2 (or is it 4:3?), and then change the height and width settings to match that of the widescreen (16:9). Kind of bizarre that it doesn't have a common preset.
From the FCE4 manual (http://support.apple.com/kb/index?page=answerlink&url=http%3A%2F%2Fmanuals.info. apple.com%2Fen%2FFinalCut_Express_4_UserManual.pdf&answerid=16777224), you can find frame size for NTSC on page 1065. This information might also be in your FCP manual.

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