HDV 1440x1080 clip convert to NTSC 720x480 letterboxed issue

PROBLEM: Cannot export in FCS2 a HDV 1440x1080 clip to NTSC 720x480 without some aspect ratio issues (squeezing, stretching or cropping)

DESIRED OUTPUT: Video clip (proper aspect ratio via letterboxing = no squeezing or stretching) on a 32' LCD flatscreen (16:9) by playing a SD DVD or connecting a laptop running Windows XP Home to it (media player or Qt).

Source clip = HDV 1080i60, frame size 1440x1080, 29.97fps, pixel aspect HD (1440x1088)

Sequence settings = Matches HDV clip setting

METHODS ATTEMPTED:
1 - Exported to QT HDV movie - Best quality and perfect aspect ratio. Cannot play it on a Windows XP computer (crashes system)

2 - QT HDV Clip conversion to AVI (via QT player export) - perfect aspect ratio but orrible quality and major artifacting.

3 - HDV clip from FCS2 via compressor = image is stretched vertically and squeezed horizontally


ROUND #2
New sequence = pixel aspect ratio NTSC CCIR 601 (anamorphic 16:9)
Placed the above HDV clip in this sequence so that it became letterboxed

4 - HDV clip from new sequence in FCS2 via compressor = image is letterboxed, but stretched horizontally so people look smushed.

5 - Repeat #4 but remove the anamorphic 16:9 = same results as #4

6 - pounding my head against the wall in frustration.

I figure that the HDV 1440x1080 aspect ratio is messing up my conversion to 16:9 (in a NTSC 4:3) because the 1440x1080 is actually a 16:12 aspect ratio. But I cannot figure out what the fix is.

Any help or guidance would be appreciated. I have spent way too many hours today researching this issue online and testing out all kinds of different variations. Please don't kick me out of the COW....I love it so much.

Thanks,
Martin

Mac Pro, dual quads
8GB RAM
FCS2