HDV/SD advice/suggestions

I've run into a bit of delima & thought I'd turn to the cow for some advice/suggestions.

I'm shooting in HDV (fairly new to HDV) and editing in Final Cut Studio 2. Most of my projects use about 50% footage I shot in HDV (Sony FX-1 at 1080i)combined with older footage shot in SD. It's documentary style, so I'm combining my shots with historical footage. The footage I get has usually been burnt to DVD using a fairly cheap converter, so it's not in the best of shape when it gets to me. Here is where the problem lies.

I want to edit in HDV, but bringing the SD footage into the timeline blows it up to about 250%, and if I want to enlarge it to fill the left & right hand sides of the screen it's at 305% and looks even worse. Furthermore, putting any of that into slow motion makes it un usable. I tried capturing the old footage in SD DV & then up converting it with Compressor, but that stretched the picture.

Final output is mainly SD DVD, but I do have the option of airing the programs on a new HD station so I'd like to keep it in HDV. But... the DVDs are the main concern. Using Compressor to turn the footage into slow motion works, but takes forever! As I said, I'd really like to keep everything in HDV, but it's starting to be a real pain. Does anyone have any input/suggestions?

Lee