Hi, i am a little confused because Pro 1.5 does not have the timecode effect. It came with Pro 2 as dit the transparant video. The timecode effect does not relate to the actual timecode of the footage.
You might want to look at dv date, it might do what you are looking for. I have never used it.
If you do not want to animate the garbage matte make your mask in the titler and use it for the track matte effect on the clip. You can even give it a fast blur to feather out the edges.
If your footage is to be played on dvd in Europe, just leave it in NTSC. Most dvd-players in Europe do not have a problem playing NTSC.
Converting NTSC to PAL means qualityloss.