I now receive an error stating "NTSC Assetts cannot be imported into PAL projects". When I clicked on Preferences in DVD Studio Pro 4.0, it says I am in NTSC though.
I am guessing it is the import process ( Also take a look at page 22 and 63 of the PDF for some discussion of HDV elements.)
Your best bet - Compressor and make sure you are choosing an NTSC Preset for 16:9 aspect size in Compressor and make an AC3 file for the audio (as an aside using Compressor and not letting DVD SP do the encoding is usdually preferred, less hang ups/stalls, more control and is ultimately going to be quicker/easier.)
1.) Make sure preferences are to NTSC
2.) Close DVD SP and open again and start new project, double check to make sure it is NTSC
3.) Bring the m2v and the AC3 file in
Try this on a short section to see if works, it should, or it may be other things, corrupt preferences etc. So some other steps may be needed.