There is another option.
There are some analog TVs from Sony and JVC (and maybe more I have not heard of) that offer "vertical compression" to support anamorphic widescreen movies. These sets squeeze the scan lines into a 16:9 area of the screen, allowing all scan lines to be seen more densely. This signifiantly improves the vertical resolution when viewing anamorphic content from a DVD player whose output option is set for 16:9 TV.
Note that this is done with 480i interlaced component video output from the DVD player. As stated earlier, there are no analog TVs that support 480p. But this combination is the best available for viewing "enhanced for widescreen" anamorphic DVDs on an analog TV.
Perhaps this is a reasonable low-budget compromise. As I have seen it, this feature is limited to the component video inputs only and the viewer may have to manually invoke the vertical compression each time that input is selected.
That said, I would still personally opt for a smaller HD-ready TV if I were shopping with limited funds.