The option to stretch non-widescreen (doesn't have to be HD, can include DVD, for example) is generally to prevent burn-in on certain sets. I don't believe LCD is subject to burn-in, so I would just display it boxed, whether the signal comes in over component/DVI/HDMI. There are those that maintain that standard definition signals on HD sets look better coming in through S-Video connections, since it "softens" the picture a bit. You might want to give that a try as well.
TV Picture diffenences between HD and non HD
I am considering the Sony 42" WEGA LCD Rear Projection HDTV (KDF-42WE655) but I am confused about the display quality for non high definition stations. Will this TV display the non high definition stations okay or do I have to stretch the screen for full display and, therefore, the picture image will be distorted? What does it look like if I do not stretch the screen? Please explain the picture display differences between the high definition stations and the non high definition stations? Thanks.....