A friend did some editing work for me, he captured the project as HDV yet put it in a 16:9 SD sequence. The client requires a HDV master.
When my friend made a HDV sequence, and cut and paste (and then rendered) all the 16:9 SD sequence into the HDV sequence, the footage understandbly looked crap

I was wondering whether I can change the original 16:9 SD sequence to HDV without have to cut and paste the 16:9 SD sequence. Is there a way to simply change the format of a sequence?

Easy. Hit sequence in the menu bar > sequence settings, and choose your video format. If the footage is HDV is should simply scale to fill the hole as if it was always a HDV sequence. Otherwise, there could be some trouble. It certainly pays to pay attention to the format of the timeline!