Since SD is a 4:3 resolution, anything wider was done via an "anamorphic" type solution. So when your native 16:9 footage goes to standard definition video (and DVD), it can either be:
2. center cropped
3. Full Height Anamorphic (FHA)
The MPEG2 encoding process will flag a 16:9 source as being anamorphic and the DVD player will know what to do with it based on the settings set for the monitor attached. I have not made a DVD in a looong time, but when I did, I just encoded my 16:9 source and it did the rest. Same for 2:3 pulldown flags when source was 23.976. It all gets flagged in the MPEG stream during the transcode/encode to mp2.