As this topic seems be coming up, more and more I wanted to find a short concise article on shooting widescreen. Here it is!
Long story short: Never use 16:9 mode on your camera, unless, you have a "TRUE" 16:9 mode camera (very expensive $3000+ US) or a (pretty expensive) camera with a lens adapter on it (This site also has a great example of 4:3 vs 16:9 crop vs True 16:9
Notes:
- ONLY iMovie HD (version 5) fully supports widescreen
More Information:
Info on standard and widescreen ratios
More on "reel" movie aspect ratios