SVideo is NTSC, which is 4:3... what you are talking about is an anamorphic signal, which doesn't exist to my knowledge. You generally have two choices for downconversion from wide HD to narrow SD, either letterbox or 'center cut'.
The output resolution of your STB should be set to the native res of your display, 1080i for CRT based sets, 720p for most other types.
The output resolution of your STB should be set to the native res of your display, 1080i for CRT based sets, 720p for most other types.