I am trying to transcode (using Sorenson Squeeze and Procoder 3) a video recorded by HVX202 in 720p mode.

I understand that the correct resolution is 960 x 720 (at 25 frames per second), as recorded by the camera.

But I can't find any resolution of 960 x 720 in both Sorenson Squeeze and Procoder 3 - both of them offer me 1280 x 720.

Who is right here?

Recording format of 720 in DVCPRO HD is 960 x 720, but actual 720 format is 1280 x 720. So, if you are transcoding to 720 format then 1280 x 720 is the right one.