Hi Danielle,
To start with, your post is confusing. At the end it seems you are trying to do a widescreen DVD, is that correct?
If you’re getting letterbox, either your footage is anamorphic or flagged as such. If you’re using a regular DV camera it may be set to record anamorphic, most likely in the squeeze mode. Only a few more expensive cameras record true anamorphic without an adapter. There’s is nothing much else besides regular 720×480 the camera could do. Was your footage exported from QuickTime at a some point? Can’t think of any other way you could have such a strange size.
Yes, Compressor is that good, you need to take the time to learn it. DVDSP is doing what you want to get from Compressor, which is what you should use. I would never let DVDSP do this.
So again, you’re trying to do an anamorphic DVD? You would have to have shot it that way or cropped 33% of it from NTSC footage to do that. Maybe some more info would help…
Have a wonderful day.