Correct, choose the MPEG-2 for DVD format, and for a preset, Widescreen Progressive (NTSC or PAL as appropriate).
It takes a bit longer to encode, but if you check the "Maximum Render Quality" at the bottom of the AME window, this should improve the downscaling quality.
Safe Harbor Computers
Thank you. I will check that button next time.
If you have MPE enabled, you might find a faster encode if you first nest the 720 30p sequence in a MPEG-DV Widescreen sequence and check the scale video to frame option on the clip (or manually scale). I've found PPr uses the GPU a lot more when scaling from a sequence rather than scaling when encoding (at least in CS6).
It should be same algorithm, Dave. And in my tests, the export times were the same.