DVD is 720x480. Somewhere in the workflow, you must downrez your HD files. Many users prefer Encore not to do that step, and export from Premiere as MPEG2-DVD and use the "Scale to Fill" option in export crop settings.
Encore will transcode, but I don't know what settings you have that would produce what you ae seeing. I suspect issues in the mov you exported. Did you export from Premiere? What are your source, sequence, and export settings? (All before you get into Encore.)