You really don't want to select letterbox. When you simply use the Compressor DVD Settings, what it's creating is a file that will play full screen on a 16:9 HD tv or letterbox on a standard 4:3 TV.
If you're losing part of the image in full screen mode on an HD TV, well this is normal. That's why we have Broadcast Safe and Title Safe markers to work with because you're going to lose up to 15% of the outside of your image depending on the TV, the DVD player and when it goes out over broadcast, the broadcaster / cable casting company.
TVs do not show 100% of your image, there's always a crop.
Walter Biscardi, Jr.
Editor, Colorist, Director, Writer, Consultant, Author, Chef. HD Post and Production Biscardi Creative Media
SONY - HDR-SR5E ( HD handycam )
FCP - 6,0,6
Imac 20" aluminium - Core 2 Duo - 3Go RAM - 1 x 500Go HDD external drive.
I am using FCP to list & transfer my holiday clips to the HDD, then drag them all down to the timeline,
add transitions & whatever, save as autonomous QT file. The QT file goes into compressor which produces the .ac3 and .m2v output using 120/150" best quality parameters ( not .aiff )
These go into DVD pro to burn a DVD suitable for a home DVD player
The results are good, but I get crenellation when panning over fixed images. Steady shots are fine, but as soon as there is any movement, the crenelation reappears.
I should add, my TV is an old CRT model - could it be the refresh rate is just not high enough to avoid crenellation, and it's time to go for a new LCD 200Hz model?