gs320 "true widescreen"

Hey I just received a panasonic pv-gs320 for christmas and have a couple questions.

First, is there any loss of image quality when using 16:9 mode? I'm pretty sure that the camera adds lines to the horizontal resolution, but takes away some from the vertical. That would mean the image would be wider with the same quality horizontally, but take a serious shot in quality on the vertical. Is this true? (sorry if thats confusing)

Second, how do I optimize the quality of my image and reduce grain? I've heard that when you turn up the settings on the "iris" and exposure, the image can get grainy. But whenever I turn them down, the image gets much to dark and doesn't look normal. When is it feasible or even useful to turn down those settings?

Any other tips from fellow gs320 owners would be great as well!

(and yes I know about the uv/protection filter thing. that seems to be the first advice anyone gives, so i'm going out and buying one tomorrow.)

Finally, vegas or premier? :D
i've tried both and can't decide. i need input from people who have a lot of experience with one or both.

It does add information to the sides, and only takes off a few lines from the top and bottom, literally. Even watching it on a 42" HDTV there is no noticable difference in quality, and widescreen looks great.

For best results, just use auto mode unless you specifically need manual controls. I have not noticed any "grainyness" just because of manual controls, but it could happen if you do something like say, closing the iris in a dark theater.

It is a nice camera and grain is not a major problem.