Format conversion problems with FCP 5

I am in the process of putting some video for a friend from her camcorder to DVD, and running into some format problems. I have an older system setup (not in the budget yet to upgrade) which still works well for me otherwise. The situation (and I am not talking about Mike Sorrentino): I had to use iMovie (8.0.6) to import the video from the camera (Panasonic SDR-H40P w/ USB output) to my Mac. That worked and got me .mov files in 'm2v1', 704x480 (834x480) format, so says QuickTime Player. I put those .mov clips into Final Cut Pro 5.1.4, using the "DV NTSC 48KHz Anamorphic" sequence preset. I did an Export to QuickTime Movie and ended up with what looks like the proper aspect ratio when I open it in QuickTime Player (10), but when I add that QT movie to my iDVD (7.1.2) project, the aspect ratio is wrong and the video is too narrow.

So, what am I doing wrong here? Conversion between video formats is not my strong suit. Thanks for any assistance.