The whole aspect ratio thing is way too big to tackle in a single post here, so let me break it down for you to give you (almost) all you need to know.
There are different screen shapes like 1.78 (16×9), 1.33 (4×3 – also called “academy”), 1.85 (the shape of normal theatrical movies), 2.35 (the shape of Panavision movies), and on and on. In fact, when Edison invented motion picture film, he experimented with all kinds of different shapes to see which was the most useful and pleasing. Other folks even toyed with round screens. Whatever.
The there are square pixels and non-square pixels, each of which affects the image presentation shape.
Chicks hate it if they were shot in 1.33 and squeezed down to 1.78. They hate it because it makes them look fat. This is a common site at sports bars when their monitors are high def 16×9 and then the commercials are in 4×3.
Chicks love it when they were shot in high def 16×9 and squeezed into the 4×3 shape; they look tall and skinny like the supermodels they are inside.
So rather than give you all the ways to solve these issues here’s the tip for always getting it right:
1) In photoshop (or using a scanner and construction paper) Make a perfect circle the that is the same height as the original image footage.
2) Do whatever process you intend to do with the real footage, whether it’s converting it, exporting it, burning it to DVD, making a dub or whatever.
3) Check to make sure that the finished test circle after your processing looks exactly like a perfect circle. If it looks like an EGG, then you messed up somewhere. Go play with the settings until you get a perfect circle.
4) Forget reading endless blogs and wikipedia about all the things that could be causing the problem. Just test it a couple times with different settings and behold… A BEAUTIFUL CIRCLE. Kiss it.