I'm having a similar problem with Nero Vision and a 4:3 Ratio Anime (which of course shouldn't be letter boxed) I'm losing the Bottom and Top when it goes onto the DVD, which cuts off half of the subtitles.
The Preview views all show correctly when creating the Video_TS files. But something is happening between the previews and getting into my DVD player.
I hate losing the bottom and top of the screen, but maybe just offsetting the subtitles is an option, sadly I seem to have that option in my to-avi program, maybe somone could recommend one that does have that option?