Shot in HD, but SD DVD delivery. Best method to edit?

Hi, I'm a first time poster, with moderate experience in FCP but never in HD...

My company did a four-camera shoot (Canon XH A1s) of a few days of basketball practice for a coaches training DVD. We're good shooters, but relatively inexperienced editors. I'm the most experienced editor however, so I will attempt to put this project together.

Here's the thing: we shot in HD, but the project will be delivered in SD on two DVDs. Half of the 40 tapes have been captured in HD, but I am finding that FCP slows down a lot when I choose the DV sequence setting. If I don't choose the DV sequence setting, I'm stuck in HD mode with the wrong aspect ratio and the computer running slow, and I anticipate problems rendering to DV. I found that I cannot edit in HD with the sequence in HD and just switch the sequence back to DV when I'm ready to render... the aspect ratios get messed up. But again, if I stay in DV sequence editing mode, the machine is running slowly since it has to switch between codecs for playback, and multiclip editing is way too slow to use. I'd like to use multiclip because of the nature of the material. I'm pretty confused.

So, should I:

Re-capture the 20 tapes that have already been captured, using downconvert from the Canon as I capture, and then capture the remaining tapes that way? If I do downconvert and turn Letterbox "on" I have found that the top letterbox bar is a bit blurry at the bottom. I can live with that, but I would rather not. This sounds good to me -- I'm very comfortable working in DV.

Or

Work in HD (with the sequence in HD too) and somehow convert to SD and add letterbox when I finish editing? Sounds good, but this will still make my machine run slower, and I've never edited HD.

Or

Is there an easy way to convert my HD footage to SD with a letterbox that won't take as long as re-capturing? I haven't been able to figure that one out.


One of the reasons we shot in HD was so we could zoom edit when necessary and pan and scan for better framing, but I am willing to give that up in the interest of getting the project done on time. Like I said, FCP slows down a lot when the sequence setting is DV and the footage is HD. I regret shooting in HD now of course, but that's what we have.

I'm pretty confused, and at a standstill, and of course with a tight deadline, so any help will be greatly appreciated.


Equipment:
Dual 2.5GHz G5, 30 inch display, Mac OS X 10.5.4, 2GB RAM, 1TB FW800, 1TB FW400 (backup), Final Cut Studio, latest version, all software up-to-date.

Thanks!

-Tim