From what i have read: Both are not that good for 16*9 compared to using an "anamorphic adaptor", and i wouldn't use squeeze or letter box i would use normal and make it 16*9 in post production.
Letterbox - cuts of part of the image, only usefull if you want less post production work for 16*9
Squeezed - Digitally squezes the letterbox image removing the black bars at the top and bottom so when you put it on a widescreen tv it unsqueezes it to normal. Again only usefull to make less work for post production.
Normal setting - records the maximum area of the camera, then in post produciton you can reframe it (up and down) slightly then add black bars or manually squeze it your self.
Advantages/disadvantages -
Letterbox - Quicker post produciton for widescreen on 4:3 TV. Cant convert to 4:3 that well.
Squeeze - Quicker post production for widescreen on 16:9 TV. Cant convert to 4:3 that well.
Normal - Slower post production for /widescreen on 4:3 TV/widescreen on 16:9 TV, but gives more creativity and can be put on 4:3 mode for 4:3 TV. as well as both the 16*9 formats.
Anamorphic Adapter - Higher quality 16:9, i have never used one but i have read its slightly more difficult to use?
