When converting the framerate (PAL=>NTSC) using programs such as TMPEG, does the program do it by adding extra frames or squeezing/lengthening the movie?

We use mainly Avisynth to change the framerate.

With AssumeFPS(), no frames are added or removed, playback speed is just changed a bit. I recommend it for any 23.976->25fps or 25->23.976fps conversion.

With ChangeFPS(), frames are added or removed to change the framerate. This may produce jerky motion but the function can be useful sometimes especially if the framerate difference is large.

You'll have to change the framerate of the audio as well. Using BeSweet will raise/lower the tone a bit (which I don't mind) but you can use an audio editor that will allow stretching the clip so that the tone won't change.