Dec 2012 and still the same problem. I downloaded Windows Movie Maker and DVD Maker on Dec 23 2012 so I have the latest version. All my videos from all my sources which I compiled into a home movie in Movie Maker were native 16:9. DVD Maker is set to 16:9 (after I changed the default setting from 4:3 which is already very lazy and weak from Microsoft; what is left in 4:3 in 2012? A majority? hardly). Everything from the source to the DVD burning software is 16:9. The Movie Maker movie shows in 16:9 when played from the file. When burned, the menu is in 16:9 but after about 2 frames the movie clicks into 4:3. It has nothing to do with any setting in MM or DVD Maker that anyone in numerous forums can find. I compiled and created my movie in Windows Movie Maker and published it in both .wmv and .mp4 so the common hack workaround of opening the movie file in MM then publishing it to DVD Maker is totally N/A. There were reports of an AVI compression setting causing it but that option is gone from the newest Movie Maker which, like everything, has lost its "Live" moniker. If any devs or moderators want to blame the DVD/Bluray players in 2012 then they're taking us all for idiots. The only explanation I have found that sounds accurate is that Microsoft attempted to allow multiple aspect ratios to burn to one DVD in DVD Maker and that slight variances in resolutions will cause DVD Maker to snap into 4:3. That's called a bug and it was reported at least 3 years ago.
This has been a reported issue in Microsoft's own forums, answers.microsoft and in technet and numerous other tech help forums. I've personally read at least 7 different threads on this very specific problem in the past 2 days trying to solve this issue. Some of the reports date back to 2007 but let's be generous and only count the Windows Vista/7 bug reports since 2009. A 3 yr old common issue with no fix or workaround is about is poor as it gets.
So this is where Windows is in 2012? Microsoft's home OS cannot author and burn DVDs in 16:9 even if their native source aspect ratio is 16:9 and the movie was created in Microsoft's own software. I'm not a habitual Microsoft critic but considering that claims of effortless home movies created by 3 year olds is always on the shortest of home computer tenets, this is very poor from Microsoft.