"Sorry if I wasn't clearer."

It's not that you weren't clear, simply that you took my sentence out of context.

What DVD does to get around this is increase the vertical resolution. Since the pixels can't change shape, you add more pixels to the other dimension. Therefore, for a 4x3 image, one of every four lines are ignored, so that the vertical image is in the correct aspect ratio of the horizontal image. However, when the image is displayed on a 16x9 set, all of the vertical lines are displayed, and the horizontal pixels are wider to make the correct aspect ratio.

Point being, nothing is squeezed into a frame in a DVD transfer. It's quite the opposite, since more vertical lines of visual information are added, which is why anamorphic transfers take up more space than letterbox transfers.

First of all, I was specifically comparing anamorphic and letterbox transfers, and as you just stated, "I know anamorphic has more vertical resolution. What is false is that vertical resolution is added (your words". In contex, what I said was correct, and in fact echoed by you in this statement. If it has "more vertical resolution", then it follows that resolution was added.

Secondly, people keep thinking that one can "squeeze" the 1920x1080 image into a 720x480 frame, and recreate the original 1920x1080 frame (which is done with special lenses with film), and this is not possible. The 1920x1080 image must be resized to 720x480 before being stored on the DVD. Any picture displayed at a resolution other than 720x480 from this transfer is the result of math calculations designed to recreate the lost visual information.

If you have a display of a 1920x1080 transfer, and a display of a 720x480 transfer upconverted to 1080, they are not of the same quality. In the case of the latter, much of the original information is lost, and visual artifacts resulting from the upconversion will be present - the amount and quality of the artifacts being dependant on the quality of your scaler.