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Here is what most guys I know are doing with their Z1 footage.
They simply downconvert upon capture (the camera does the downconvert). The original tape gets stored away for a future HD version if needed.
I have shot a bunch of scenes with that cam. Most of the time I have framed more for 4:3 than 16:9 and when I output I have the camera do a center cut. The FX1 does not do a center cut so you have to take care of that in post.
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