I’m having a similar dilemma, but for different reasons (I’m attempting to transcode cell-phone 3GP video to a QuickTime movie and thus avoid the need to render once in FCE).
The transcoding works fine, and produces a 720×480 (DV-NTSC) video from the 480×352 original. I bring it into FCE and the clip looks fine in the viewer, but once in the timeline the canvas shows only a cropped-in portion. Scaling doesn’t do anything but make the same cropped-in area appear smaller in the canvas, with black around it.
I _think_ part of the problem is that FCE sees the frame size still as 480×352 (the Mac OS Finder displays these same dimensions), whereas the QuickTime Player insists its a 720×480 size (pillarboxed; it shows a 640×480 actual size). My theory is that FCE is behaving as if the video is smaller than it really is; it essentially stops “reading” once it has read 480×352.
I do not, unfortunately, have a theory of what to do about it.
-Kevin