Aspect ratio ?

[JonRead]

I use ADVC-100 from Canopus to capture analogue video in to DV. I use Vegas 7 to encode. Vegas doesn't seem to give me any option of what aspect I capture in, but it will allow me to alter the already captured footage. So for instance when the video is captured, I then select 16:9 widescreen (in the project templates) and de-tick "keep aspect ratio", and then encode, and all seems fine. But am I wrongfully stretching the image ? As the original video is 16:9 it then seems to capture in 4:9, and then I am re-making it 16:9. Sorry if this all seems confusing but I am a newbie to DV encoding and aspects.

So am I doing things right to have a true 16:9 picture ?