AVS Special Member
Join Date: May 2008
Location: San Francisco - East Bay area
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If you're talking about the technique used on DVDs to produce widescreen images in that originally-native 4:3 format, no there is no loss of sharpness when you use the widescreen option for DVDs.
For other products (like gaming consoles), the outcome depends ENTIRELY on how they are doing it. If they use a low-end technique and simply zoom on the image... it won't look very good on an HDTV. If they use a more sophisticated approach (like that of widescreen DVDs), images should look better.
If the game animation is as good as computer animation used for movies like Finding Nemo or Robots, etc., the images from the game should look pretty good. If the game animation is more along the quality of typical movies on DVD (say Austin Powers: The Spy Who Shagged Me, or The Dark Knight, or Terminator2), the game images won't be very impressive and there won't be much of anything you can do to make them look better. The large size and high resolution of HDTV displays give low quality SD images nowhere to hide.
"Movies is magic..." Van Dyke Parks
THX Certified Professional Video Calibration
Widescreen Review -- Home Theater & Sound