When downconverting to DV, for playback on a 16:9 TV which is the correct setting - squeeze or letterbox?

Squeeze. That will give you anamorphic 16:9 at the full 720x480 resolution.

Thanks Boyd, and for which situation would you use letterbox?

If you're playing the footage on a 4:3 TV, like mine.

I never use letterboxing, regardless of the set it's palyed on. Your DVD authoring software should be able to flag it as 16:9 footage so it letterboxes automatically on a 4:3 set and plays full widescreen on a 16:9 set.

There are two occasions when you should use "letterbox". One, when you want to preview footage on a 4:3 TV. Two, when you want to burn a DVD on a stand-alone DVD recorder that doesn't have a widescreen setting. I would never actually capture footage for editing in the "letterbox" mode, even if it was eventually going to be played back on a 4:3 TV. I would just (as stated above) capture anamorphic and let the DVD player do the letterboxing. That way it will play back correctly formatted on both 4:3 and 16:9 sets.

What if you record to a DVD recorder that doesn't have a widescreen setting using squeeze - on a widescreen TV will it look ok?

What if you record to a DVD recorder that doesn't have a widescreen setting using squeeze - on a widescreen TV will it look ok?
In that case it would look fine on a widescreen TV but vertically stretched on a 4:3 TV.