"The camera images are compressed horizontally so that they will be displayed optimally on a 16:9 monitor." Sort of like a poor mans 16:9 conversion lens. (a real poor man)
[quote author=GenJerDan link=board=Events;num=1097926326;start=0#1 date=10/16/04 at 09:07:07]I've yet to figure out, despite all the explanations, which is "better" to use.[/quote]
I've got an extensive squeeze vs. anamorphic vs. letterbox segment on the upcoming DVD, as well as a long essay on it in the book, plus the full anamorphic adapter guide. So it's obviously an extensive subject.
However, I can sum it up for you in one sentence: if you're shooting for a 4:3 TV, use letterbox mode. If you're shooting for a 16:9 TV, use squeeze mode. (unless you want to do extensive post-processing for an enhanced 16:9 look, as detailed by Disjecta).