1) I wasn't very unimpressed with the USB playback. It couldn't play all my mkvs and there seemed to be a pattern that it was mostly only SD rips and older HD rips that worked. I don't think it has a well updated codec library. It's too annoying to have something EVER not just work so I now have it connected to a PC and use XBMC. TV works very well with it and even takes the message from the computer to change to 24hz when a 24p file is played with only a 1.3s delay. I don't think even their USB playback software does that but I could be wrong, gave up on it quickly.
2) If you have to change the screen position I think you got a lemon? Screen-fit seems to be Samsung's version of 1:1 pixelmapping if I understand correctly, but then again, I don't use any devices outputting interlaced picture. Maybe try titling the source PC and using 16x9? I hope there is nothing wrong with yours but maybe simply poor compatibility for an older device? I think it should just have 16x9 as an option in every mode and they have screen-fit only instead because of all the post-processing. Which may interfere with the 1080i device? Random guess though, I'm not much of an expert! Also, in old style TVs wasn't there an expectation that the edges of the picture would be cropped out past the borders of the TV? I think if you're using Screen-Fit you really are just getting what you're supposed to get and the problem is with the older device or the content you are playing?
Consider the part about action safe where it shows what is expected to be cropped out. I know when I play old SD files, I sometimes see funny lines around the top and bottom rows of pixels.
Thanks about the Game settings Chicolom. Only thing I ended up changing (which I'm sure you did as well and just didn't think about it in saying to use the same as standard) was keeping Sharpness at 50. It can go a bit lower but at 1-10 it makes things quite fuzzy on the xbox.Edited by qdizzle - 11/4/12 at 9:06pm