I don't have compressor, so I can't speak to that aspect, but what I have done is this. I export the media as ProRess 422 (I have used AIC in the past ). This export is full sized ( the same as the project settings ) . I then open iDVD and set the project settings for the DVD. Then I drag and drop the video that I exported into the iDVD project. Both ProRess 422 and Apple Intermeadiate Codec have wored very well for me. How Compressor handles things is not something I can speak to, but I would expect a simular work flow would work. I do not ever export right to iDVD. I always export the media then import it into iDVD.
If your iDVD project is changed from 16:9 to 4:3 you may have the wrong project settings in iDVD.