I have a similar, related question: I have a Sony cam (I'm at work so I can't tell you the model number) that records in 16:9 (not HD sadly).
Importing the footage into iMovie compresses it horizontally, but when saving back to DV tape, the image springs back to 16:9. Is any quality being lost?
Secondly, when I tried to incorporate some photos with my video footage annoyingly the resulting footage hopped around from 16:9 to 4:3 with my widescreen TV pinging about showing the 16:9 footage correctly, but the 4:3 footage with black bars on the left and right. Is there any way to FORCE iMovie to use 16:9 all the time? If not, will the new iMovie HD help? Should I look to Final Cut Express or After Effects?