Hi,
first of all your settings are o.k. to load the stuff to FCP.
The first Problem is that you went for “Letterboxing”, which is normal 4:3, just cropping the top & Bottom with Letterboxes.
There’s a way, to give you the 16:9 again, but that is rather complicate and you will lose some resolution.
The DVD I would make in DVDSTP – First Compress the finished film with Compressor, then Build a DVD in DVD Studio Pro, a Video_TS Folder, this Folder you can burn then with Roxio Toast.
Good Luck.
Sascha
P.S.: If you have, run the Magic Bullet – so you make progressive frames from the interlaced footage – will look much better.