I am looking to get a new camcorder on Boxing Day (likely MiniDV or DVD) and want to ensure that I get one that can take advantage of my widescreen tv.

I see some camcorders state they have a 16:9 mode but does that mean it simply mats the image into letterbox or is it anamorphic when I output to the tv directly?

Then if I download clips to my computer, edit and then burn a bunch to a DVD would it still be anamorphic or letterbox? I 'assume' that will depend on my software.

Any recommendations on camcorders and/or software?

Many thanks!

Most of the new camcorders have anamorphic widescreen mode - exactly what you need to take full advantage of 16x9 TV. Different brands and models achieve it differently - some by cropping width and expanding height, some by adding horizontal resolution and field of view. I suggest to look at Canon Opturas, they do this good enough for consumer level.
If you connect camcorder directly to TV, TV has to be set to FULL mode to display anamorphic image properly. If you author DVD you have to follow same simple rule in all the steps:
- shoot as 16x9 (NOT as letterbox)
- capture as 16x9
- edit as 16x9
- author DVD as 16x9

Then this DVD will be properly shown on square and widescreen TVs.
As for software I'd recommend Sony Vegas or Movie Studio (cheaper version).

I myself like Adobe Premier Elements since 1.0 (its now up to 2.0), although it is lacking HD...

http://www.adobe.com/products/premiereel/main.html

I use it with my Sony HC90 in 16:9 ...

...and I find it much more user friendly than Adobe Premier Pro...

Brian