Your sequence settings depend of the final destination.
1. BluRay setup with HD sequence. The DV footage can either be scaled up with the help of Red Giants HD instant or
You can leave the DV footage as it is if its ‘bad’ quality (no scaling) and put the same clip behind and scale that up (or stretch) and give it a blur. Some like this method, some dont.
2. dvd with dv sequence: far out the easiest one. Scale the HD footage down to fit.
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