So it has to do with anamorphic ar on DVD then? If you burn to DVD the panorama converted avi then the resultant mpeg2 will play back in 16:9 resolution suitable for widescreen tv.
In that case given I am producing an Xvid mpeg2 is not applicable and I should add another resize at the end as follows:
lanczos4resize(688,508)
crop(0,14,0,-14)
addborders(16,0,16,0)
panorama(3)
lanczos4resize(720,400) [ or lanczos4resize(640,352) ]
Is that correct?