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Anamorphic is the not-so-secret sauce that uses the full resolution of a DVD to deliver a widescreen image. It’s a simple flag that says “stretch this image 33% wider than usual”. Though it’s widely used in Europe and Australia for SD widescreen broadcast, as well as all professionally mastered DVDs, it’s not widely understood in the US.
In North America, SD 4:3 evolved into HD 16:9 with no intermediate step. But hang on: now that many of us have jumped to HD production, why should we care about standard definition tricks? Because some clients may require an SD master, and because Motion has a couple of quirks relating to anamorphic resolutions. Important? Very.
Note: all screenshots shown here are taken from Motion projects exported to ProRes 422 QuickTime movies, dropped into an FCP X timeline and viewed at 100%.
First things first: if you deliver a widescreen image with black bars burned into the top and bottom, you’re doing it wrong. Deliver an anamorphic DVD, and DVD players connected to older 4:3 TVs will automatically add the black bars during playback. Conversely, HD sets will stretch the image appropriately to show the full picture at the best possible resolution. Sure, HD looks better again, but not everyone has Blu-ray or a Mac under their TV. Adding black bars yourself is a guaranteed way to throw away 25% of your resolution. Don’t.

Project settings for PAL anamorphic
Start from a nearly-matching preset (NTSC or PAL, depending on your region) and choose Edit > Project Properties. In the Inspector, set the width and height to 720x576 for PAL, and 720x486 for NTSC (D1). Set the aspect ratio to the matching “anamorphic” aspect ratio. Also, set Field Order to None for a progressive-scan picture, to remove any interlacing display problems from the equation.
Now, import a sharp image into the Canvas. It will probably look jaggy, like this:

Jaggies in PAL with Anamorphic aspect ratio
Not good. Let’s try to render square pixels instead. We can squish them back to actual size later in FCP X. So, in PAL we might use 1050x576, and NTSC (D1) we’d use 872x486, each with “square” aspect ratio. Go ahead and change the Project Properties to match.
IMPORTANT NOTE: square pixel sizes have changed to match the widths used by newer Adobe apps. Why? See here.
Project settings for PAL wide square pixels
Now, you’ll see a marked improvement. Motion does a much better job of rendering square pixels than it does at rendering anamorphic ones.

Fewer jaggies with square aspect ratio
But hang on, it’s still not great. What’s the problem?
Well, this is “Normal” quality output. For anamorphic output especially, the “Best” render setting makes a huge difference. On export, visit the Render pane, look for Render Quality, and choose "Best" instead of "Current Settings".
Export settings in Motion
Best render quality is important.

No jaggies with square aspect ratio in Best render quality
Also remember to set your FCP X project to the correct settings, using progressive if you want the cleanest stills. Here’s PAL:

Project settings in FCP X
For the best quality of all, jump straight to HD in Motion. Using the 1080p preset, the resulting slight softness after downscaling to SD is definitely on the pleasing side.

No jaggies at all in 1920x1080
So what’s the quick summary? If you can, use HD resolutions in Motion, even if you’re delivering in SD. If you would prefer to use SD resolutions in Motion, use square pixels, and always render as Best quality.
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