What is teh difference between sequence settings and capture settings?

They should match, except that your sequence should be 23.98 no fields instead of 29.97 lower field. Also you should know that there is what *I* would call a "bug" in FCP where the Sequence settings (under the Sequence menu at the top of the screen) don't always correspond to what you set up for your sequence in your Audio/Video Settings, so you'll need to verify them there as well. Be sure it's set correctly before you make any edits, because if you change a sequence's settings that has edited clips on the timeline, they'll disappear once you change settings.

I don't know WHY the Audio/Video Settings don't override the actual sequence settings. Nor do I know why this information isn't saved with the project file. When you open an existing FCP project, it defaults to whatever the most recent project's settings were. That's very frustrating, because I switch back and forth between like four different projects with different types of input/output on a typical day.

You'll know your sequence settings match your capture settings when you drag a clip into the timeline and no red render bar appears over it.
 
the audio/video settings are saved in the user>library>prefs>fcp user prefs file on your drive. sequence settings is a way of changing the settings for a sequence that's already open, without effecting the default (audio/video) settings which effect new sequences.
 
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