Problem: If you want to make a 16:9 widescreen DVD from a video project that was shot in RED's 2:1 aspect ratio (ie. 2048x1024), some precautions must be taken during the final compression in order to avoid stretching.
If just drop your 2:1 video into Compressor, and apply a DVD preset, it will stretch your video vertically to fit the 16:9 frame. The problem is that it's a somewhat subtle stretch, so it's easy to miss the problem altogether.
Solution: We need to add letterboxing to the top and bottom of the video such that when it plays out in 16:9 widescreen, everything looks normal. It's easiest to just create a new Compressor setting to do this. If you don't want to follow these steps, skip to the download below.
In Compressor, locate the "DVD: Best Quality 90 Minutes" preset folder (in the "DVD" folder). Click on it, and then click on the "duplicate" icon (the third icon in the settings window). This will duplicate the entire folder, with the video and audio presets, into your custom settings folder (at the bottom of the settings window).
Locate the new settings folder. If you click on the folder, you can rename it in the Inspector window. I just appended "2:1 to 16:9" to the name.
Now, click on the MPEG-2 setting in that folder. This will bring up a bunch of info in the inspector window. Go to the Geometry tab of the inspector (5th icon), and change Padding Top to 27, and Padding Bottom to 27. Click on the save button in the lower right of the inspector.
Now all you have to do is drag your new "DVD: Best Quality 90 Minutes 2:1 to 16:9" folder on top of your video, and you're all set to go. The final output (which you can verify in DVD Studio Pro) will be a 16:9 Anamorphic video with some black on the top and bottom, so when it stretches out to widescreen everything will look right.
Download: If you're having problems, I've zipped up my Compressor setting for you.
Download here. Unzip it, and drop the folder into the ~user/Library/Application Support/Compressor folder, then restart Compressor. The preset will appear in your custom settings.