How can I bring this footage in so that it isn't squished. With bars is great. But it just ignores the bars and squishes the images.
I’m not familiar with i-movie for Mac. If I understood your question, you are trying to copy a segment of your video by using your camcorder as a pass through device from your DVD player.
In that case I would not do what you’re doing because you will be introducing lossy quality to the original video by reencoding. I would rip the DVD as DVD Decrypter (freeware) and extract portion of the video with a software like Avidemux (freeware) very easily. Your display aspect ratio should be intact then. The display aspect ratio is the result of stored aspect ratio and pixel aspect ratio. (DAR= SAR * PAR) Otherwise the display aspect ratio must be rerendered to be played correctly for the whatever the media player.
Hybrid Mode
