#2.
From native m2t file render to mpeg-2 using DVDA PAL Widescreen template. Results have plenty of Wow factor.
As to #1, I suspect this mightn't fly too well, probably would depend on CPU performance. Perhaps better to render to Sony YUV codec or native Declink codec. I'm not certain as to what the native codec is for sending data down SD SDI.
Bob.
If you are shooting HDV and delivering on DVD, you have at least 3 cool options.
1) Downconvert to DV in camera, proceed to DVD master using the standard DV workflow.
2) Capture as HDV, downconvert to 60i (or 50i if PAL) standard def .avi using the Sony YUV codec. The files will be big but you'll get great quality- this method takes the negatives (such as they are) of DV compression out of the equation. Monitoring via Decklink is possible also. Render to 60i or 50i MPEG-2 for DVD.
3) (Personal favorite, for 60i HDV only) Capture as HDV, downconvert to 24p 720x480 16:9 .avi using the Sony YUV codec (using "Best" quality rendering). Cut in NTSC DV 24p Widescreen timeline. Render to 24p Widescreen MPEG-2 for DVD.