[Ann Bens]

Export frame and import it into Encore.

[Ann Bens]

Are you sure it a video clip and not a still?

[Ann Bens]

For DVD it is easier to start a normal widescreen project 720×576
Import footage, go to interprete footage and set it to widescreen.
Unfortunately you will not loose the the black bar this because Adobe change the pixel aspect ratio. You could scale the footage up.

[Ann Bens]

You are quite right when using a clean cut and adding a cross dissolve or any other transition, it is not going to work.
Transitions need handles.
So after using the razor, trim 15 frames of the right side of the left clip. Trim of 15 frames of the left side of the right clip.
Now add the transition.

The issue mentioned by Colin is fixed in CS4 4.1

[Ann Bens]

Whats your source footage?

[Ann Bens]

You need to set unnumbered markers on the timeline first.

[Ann Bens]

Do the credit in Elements

[Ann Bens]

If the audio is AC3 you probably need to install a ac3filter codec.
Run the dvd through GSpot and see if a codec is missing.
https://www.headbands.com/gspot/

[Ann Bens]

Your audio keyframes are probably set to track option instead of clip option.

[Ann Bens]

I assume the camera should comes with software to get your clips onto the harddrive of your pc. .cpi is the wrong extention, it should be someting like .mpg or another kind of mpeg.