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There are several ways to do this. I believe it is best to always capture or import your HD clips and edit in HD in Premiere Pro. Then you can start a new widescreen SD project in Premiere Pro (720 x 480 with a 1.33 pixel aspect ratio) and then import the original HD project into that SD project. You then scale down the videos on the timeline and export either SD DV AVIs from there or separate mpeg-2 and wav files which you can then import into an authoring program to automatically create a simple playable DVD movie with letterboxed SD video or author a DVD program in Encore with menus and interactivity.
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