I have the X1 also and I run it in 16:9 mode with a 16:9 screen. But, I don't use it for video games. I just use it for DVD's and occasional HDTV. I guess you should determine if you will use 4:3 sources more or 16:9 sources, and choose accordingly. The screen size you're talking about sounds small though. You should read the article "4:3 or 16:9" at Projectorcentral.com, it's great and will help you decide.