You might be able to determine which HD to SD workflow produces the best video using a test chart.
http://www.belle-nuit.com/testchart.htmlI used the 1920x1080 chart and went from AVCHD --> DV --> DVD and compared that to going from AVCHD --> DVD. The AVCHD --> DVD workflow produced the better results, IMO.
In the first case I used the 1920x1080 AVCHD project preset and shared to a DV-AVI widescreen video. I then used the DV-AVI video in a DV-Widescreen project preset and shared to a DVD-widescreen disc.
In the second case I just used the 1920x1080 AVCHD project preset and shared directly to DVD-widescreen disc.
EDIT: I should add that I did this with Premiere Elements 10.