DV vs HDV down-convert.  HDV down convert is slightly better due to better DV conversion by software than in realtime in camera.  The conversion is likely working to more decimal places figures than realtime.  Not all DV encoders are created equal for example the Canopus DV codec has always been highly regarded for quality and is probably better than the codec in the camera.  This is where the gains are being made when down converting HDV to DV.

The big benefit people are finding by working in HDV to later output to SD DVD is maximum quality is maintained throughout the workflow.  A typical HDV camcorder can record 600 - 700 tvl to tape in 4:2:0.  By finishing the project in HDV or high quality intermediate codec then resizing to 720x480 the colour resolution is now approaching 4:2:2. When fed into a  MPEG2 DVD compressor there is twice as much colour information and "real" resolution for the compressor to work with which produces much better output.  This pays dividends when working with CGI and titles.  Anyone who works in DV with graphics will tell you how badly mashed they get!

If you work with DV footage throughout your workflow you really do shaft yourself.  The 720x480 DV stream has really only about 520x400 (if that) lines of resolution at best with a colour resolution 4:1:1 for ntsc. Feed that into your DVD compressor which colour samples at 4:2:0 and it make mince meat of your footage.  Incidentally DV PAL to SD DVD is better as the use a consistent colour sampling scheme of 4:2:0.

From "Spex", November 21, 2006 rec.video.production

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HDV comes in two flavors: 720p (as implemented by JVC) and 1080i (as
implemented by Sony and Canon), known as HDV1 and HDV2, respectively.

Both flavors of HDV use CBR MPEG-2 encoding for the video stream and
4:1 lossy compressed MPEG-1 Layer II encoding at 192 kbps per channel
for the 2-channel audio stream. The 720p HDV format writes to tape at
a data rate of approximately 19.7 Mbps while the 1080i HDV format
writes to tape at a data rate of approximately 25 Mbps, just like
ordinary DV, Panasonic's DVCPRO, and Sony's DVCAM formats.

The 720p flavor of HDV uses square pixels and has a frame size of 1280
by 720 while the 1080i flavor of HDV uses non-square pixels and has a
frame size of 1920 by 1080, although only 1440 pixels per scan line
are written to tape.

Like all HD formats, both 720p HDV and 1080i HDV use a widescreen 16:9
display aspect ratio. The 720p flavor of HDV has a 1:1 pixel aspect
ratio and the 1080i flavor of HDV has a 1.333:1 pixel aspect ratio.

The 1080i flavor of HDV uses so-called "long-GOP" (one-half second)
encoding, with 12 frames per GOP in PAL-like 50i mode and 15 frames
per GOP in NTSC-like 60i mode.