Here are the workarounds I used to produce a PAL DVD disc from recordings of UK FreeView digital SDTV 16:9 broadcasts in the PAL DVB-T system recorded by Windows Media Centre (WMC) running on Windows 7. The workarounds do not apply to NTSC recordings (eg in North America), HDTV broadcasts, nor necessarily to the same products operating in other versions of Windows. For the sake of brevity I have not explained why these worked.
Editing with Windows Live Movie Maker, WLMM
Do NOT delete the first frame of the WMC recording. THIS IS IMPORTANT. If the first frame is left in place until editing is completed, then all subsequent scenes will remain full frame 16:9. However, if the first frame is deleted during the edit process then, when the project is saved, subsequent scenes and the Preview pane will be distorted to 4:3.
Saving Movie with WLMM
None of the 'Save movie' options in WLMM are tailored to suit SDTV recordings in the PAL system. It is necessary to select 'Create custom setting' (which I called 'for PAL DVD') and set up the following:
Width: 704 pixels
Height: 396 pixels
Bit rate: 8000 kbps
Frame rate: 25 fps
Audio format: 128 kbps, 48kHz stereo
When the movie edit is complete and an mpeg movie is required, the custom 'Save movie' option (above) should be selected to render the movie. (The PROJECT should NOT be saved after the first frame has been deleted, but it is OK to save the MOVIE). The resulting mpeg-4 (or wmv) movies display at the correct 16:9 aspect ratio in all the players I tried.
UK PAL users will notice that UK commercial SDTV 16:9 broadcasts such as ITV, Channels 4 & 5 (704x576), are displayed full screen 16:9, and BBC broadcasts (720x576) are also 16:9 but have thin black stripes a few pixels thick along the top and bottom edges.
Windows DVD Maker, WDM
If the mpeg files are created for use in third-party products, the mpeg-4 format output by WLMM is adequate.
If the mpeg files are required to burn a DVD with WDM then the mpeg-4 format is unsuitable. The standard required for PAL DVD is mpeg-2 not mpeg-4. Furthermore mpeg-4 is not supported by WDM.
If the movie is saved by WLMM in wmv format it can be read by WDM and used to burn a DVD. However, when it is played back in a DVD player such as WMP, the disc displays in 4:3 format rather than 16:9, even though it displayed as 16:9 in the DVD Preview option.
The workaround is not to use WDM but to read the movie into third party freeware such as DVD Flick to prepare the DVD. This displays OK as 16:9. I used DVD Fab to burn the DVD.