Aspect ratio problem with MOD files edited into AVI

[Ahoy]

A colleague in France took some video for me with his new camera and sent me it on a memory stick. There were lots and lots of MOD files and MOI files and when I played the MOD files on my computer with Windows Media Player the aspect ratio was wrong. The video was clearly 16:9 but it played squashed up laterally to 4:3 with black, vertical bars down the sides. However, if played in Media Player Classic it played correctly with the proper 16:9 aspect ratio. Media Player Classic revealed the following properties: Audio: Dolby AC3 48000Hz 6ch 384Kbps [AC-3]
Video: MPEG2 Video 720x576 (4:3) 25.00fps 8400Kbps [Video]
Clearly the labelling of this video material was wrong.
I had difficulty finding suitable editing software that would accept this MOD format. Eventually the most recent Ulead® VideoStudio® SE was able to take the large number of files and output them in AVI format. However, there were interlacing problems which I resolved by running the AVI through another editor, ADOBE Premiere Standard.
Everything seemed to be going fine. I had lost the sound but that didn't matter as I was going to set the final edit to music.
After I did this I output from Premiere an AVI file that I was very happy with. It was in 16:9. It filled the screen nicely in Windows Media Player and also in Media Player Classic. I thought I'd cracked it. I converted it to FLV for upload to my web site, where I use a WUAALA player. That worked fine too.
Finally and most importantly I went to upload it to Youtube. The file was too large so I output it again from Premiere but this time in MPEG2 format. Now the aspect ratio is correct in Windows Media Player and YouTube player but I have black lines down the side AND it is also letter-boxed top and bottom. In other words the 16:9 video is surrounded by (framed in) black so the video is not as large as it should be. However, in Media Player Classic the video is now squashed vertically with horizontal black bars above and below the frame.
I think that the problems stem from the incorrect labelling of the original MOD file. It seems that some players take notice of this data and others don't. Is there any way that I can relabel the properties of my final files, the AVI, the MPEG and the FLV so that the video always plays in 16:9 with no black bars at all? I tried MPEG4 Modifier but the files were not MPEG4 so the program would not accept the AVI file. Any bright ideas?

[jagabo]

When you output as MPEG2 you specified that you wanted a 4:3 video. Premiere letterboxed the 16:9 source into a 4:3 encoding to preserve the picture aspect ratio. When you play the resulting video (with letterbox bars top and bottom) on a wide screen device the 4:3 frame gets pillarboxed to maintain the aspect ratio. The final result is a small picture in the middle of the screen with both letterbox and pillarbox bars.

The solution is to encode MPEG2 as 16:9, not 4:3. Though I'm not sure if YouTube will handle 16:9 DAR MPEG video properly.