Standard definition 480i is a 4:3 aspect ratio.
720:480 = 3:2. The pixels are 10 percent taller than they are wide (PAR = 10:11). Note that a 720x480 video actually contains the 4:3 images in a 704x480 portion of the frame. There are 8 pixels added to each side for padding. So the full 720 pixel wide frame is slightly wider than 4:3.
On a digital monitor with square pixels, displaying 4:3 video at 720x480 results in an image that looks stretched. Recording the NTSC video in 640x480 gives you a square pixel output. 640/480 = 1.3333 4/3
= 1.3333. 720/480 = 1.5
When recording with a DVD recorder the DVD recorder will record the video as 720x480. During playback the DVD player detects that the video is 4:3 and will letterbox the output with black bars on the side.
When recording a video for playback on a computer monitor we record the video at 640x480 to keep the pixel output square. We also display the live video to the operator at 640x480 to help them determine if something is out of round.

If the 640x480 recorded video was to be converted to a DVD we would also change it back to rectangular 720x480 (704x480) in order for it to play back correctly on a TV monitor.