With my WDTV Live box connected to my set using the composite video cable provided, a high def 16x9 movie I have on my hard drive (that normally plays in widescreen when I use the HDMI output), plays in letterbox form inside the 4x3 aspect ratio output. A 4x3 formatted file fills the screen. To test, I set the WDTV's Audio/Video aspect ratio" settings to have a "normal" output and not "widescreen".
Be advised that in 4x3 mode, the WD menu screens will appear to be squeezed horizontally. I think they designed them and the icons to look correct in widescreen mode and not in 4x3. And composite video out of this box, compared to HDMI, looks like crap. But if that's what you have to work with, you should be fine.
The cables that come with the unit plug two into mini jacks on the rear (one for composite and audio, the other for component and audio) and are really really short. They're only about 42" tip to tip, so if you need them longer, be prepared to buy some RCA male to male cables for the video and two audio leads and use some RCA female to female barrel adapters to join them together.