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HDV is actually 1440x1080, and plays back as 1920x1080. Where are you getting the distortion, in AE or FCP or QT? AE has a button on the bottom right of the video that looks like a rectangle with arrows, this will toggle the display. It shouldn't be a problem anywhere else.
Making a movie in AE: there is a There are a few settings you can use. HDV, Pro Res, or Animation. It all depends. If you can use pro res in FCP, you may want to avoid HDV codec!
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