Add me to the list of having that same problem. I watched spiderman last night and the only way to change it was to change my 1080p lcd to full. When I streamed the movie over media center, it showed up perfectly in 16:9 while the monitor was in native mode.
My Westinghouse 47" lcd did the same thing. Buy a VGA cable, looks great, fills the screen perfect. BTW I use 1080p. Maybe it's a limitation of the upconverting with DVD's that MS has allowed only with VGA. VGA= Great 16x9, Component = 4x3.
Go for the MS cable, I tried the Madcatz cable to save some money and the PQ was terrible, 1st party cable is great.
I set the Xbox to 720p and it actually does look better than 480p on my EDTV.
Suprised but pleased, thanks for that!
I also tried switching to 'standard' instead of 'widescreen' in 480 and in 'standard'
DVDs actually displayed correctly. Of course this is not an option in 720p.
I have no idea why this is, my TV is EDTV but it's certainly widescreen...weird.
Kinda makes me skeptical of getting the HD add on if the movies are not going
to display correctly. I may resort to getting the VGA cable to fix this I guess.