Ten,
With the Xbox progressive enabled, all games will default to 16:9 even if they do not offer a 16:9 mode (in software). This means very wide, fat cars in Project Gotham for instance. The only games that I have that support 16:9 are DOA3, Amped and Rallisport. Halo, PGR, JSRF, NFL Fever & SIlent Hill 2 do not, so playing them in progressive mode on the Panny locks in 16:9 mode (offering a 'zoom' option which loses lots of the picture), resulting in stretched images.
My solution is that I now run the XBox interlaced and let the panny handle the de-interlacing, this then gives me the full range of options for aspect ratios. In order to avoid having 4:3 sidebars and running the risk of burn-in, I choose the 'just' mode, which keeps the central portion of the image geometrically correct and stretches toward the edges, filling the 16:9 frame for a 4:3 game image. Games that offer a 16:9 mode, I set the mode in software and then select the 16:9 aspect ratio on the set. I feel this offers the best compromise at the moment, until more games start to offer 480p 16:9 modes.
This may not be too clear, have been oncall all week and only had about 6 hours sleep in that time, so ask me again or mail me if you need more info...