The only real advantage to Anamorphic is when it is shot in Anamorph as you get more resolution on screen.
By converting a non-anamorphic source to anamorphic, you are not increasing the resolution, in fact you are adding a level of processing that can only degrade the image, so I will do some testing, but I can't see an adavantage to it at this stage.
Re mixing the different video and matching it, that is what I do for a living with film, so I am not too worried about getting it right.
I have the tools and the skills to pretty much match anything to anything else, down to matching specific film grains from specific manufacturers, so it should be OK.
Obviously the best point to do it is on scene changes, as otherwise you are asking for trouble.
At this stage I am thinking of 2 versions (maybe 3). All will be DVD-9, and there will be an uncompressed version.
1) As original as possible - Basically a transfer from the LD version with a colour grading to the SE version to match it's colour balance.
The original LD transfer was unfortunately done in a way that muted the colours and reduced the ANSI contrast ratio. I intend tweaking only to grade it to as close to an original film master as possible. As a second pass may try ripping the audio track from the SE to get a dolby digital track, and editing in areas where it is different. Not sure if that will be worth the effort though re the audio, the laserdisc stereo track is very good.
2) The improved edition. Basically as suggested by some here. A hybrid based mostly on the SE leaving in 'error corrections' and maybe some of the less offensive enhancements. (background extensions, matte cleanups etc.) with the dolby digital soundtrack, but getting rid of the horror show like the cantina musical number and so on.
Also thinking about allowing angle selection on changed scenes up to a point.
Wadda y'all think? It will all be for my own personal use of course.