Check your workflow. DVDs are 720x480 for NTSC and 720x576 for PAL. Widescreen video is anamorphic not a different frame size. Resize all your video to this frame size before submitting it to the encoder. Don't submit HD video to any encoder. Check your resized footage in Final Cut Pro before proceeding to encode the footage. If that footage looks good at the scaled down size, proceed to encoding.
If you have trouble encoding your video to DVD, it could be the video itself. Not all video is compresses equally. You can save time by checking your footage before you burn it to DVD. I would recommend using the format command in DVD SP, and then using
DVDxDV to rip the footage back from the VIDEO_TS folder. Check the ripped footage in FCP, if it looks good proceed to burn the DVD. If it looks bad, adjust your compressor settings.
Compression is just plain hard, but there are ways to make it less painful.