I have the Sony 60WF655 HDTV and I get the same results with the Xbox. I do not believe this is a problem with the Xbox, cables or TVs. (For the following comments, my Xbox video settings are 16:9, 480p y, 720p y, 1080i y.) I have found through experimentation that some titles actually output true 16:9 in progressive mode, but most do not. For the titles that do not, most seem to output a compressed 4:3 image that requires stretching to achieve the proper aspect ratio. I would theorize this may be due to a software limitation of the title, not the hardware.
I.E. Tony Hawk PS4 is spec'd as 720p and it produces a true 16:9 image in 720p(as the Sony reports, full mode.) Enter the Matrix in 1080i also produces a true 16:9 image. However,
most other games that are spec'd 480p do not follow this behavior, i.e Project Gotham 2, ESPN NFL 2k5, Rallisport 2, Halo 2, Toca 2, etc. Unless the Xbox is set to 16:9, 480p n, 720p n, 1080i n, these games' output will be 4:3 (yet progressive as my Sony reports), needing to be stretched horizontally to fill 16:9 and display the correct aspect ratio.
Now, this all may seem strange up to this point, but what is really odd and also what I believe to be proof that this is a software issue is that FIFA 2004 outputs 4:3 480p and does not require the image to be stretched to maintain the correct aspect ratio. In other words, it is a true 4:3 480p game, whereas there are a few true 16:9 720p/1080i games out there and the vast majority of games are pseudo-16:9 with stretching, yet 480p.
I wish I could draw a better conclusion. I thought at first it was my TV or the Xbox itself, but then it should be "broken" for all 480p games, which is not the case with FIFA. This is precisely why I believe the issue to be hardware-related.
I have played games in 16:9 in 480P stretched to fit the screen and they look like crap. So I have been setting the Xbox to not produce any progressive output, because it qualitatively seems that a 16:9 interlaced picture is superior to a stretched progressive one.
Needless to say I am dissappointed with the Xbox when it comes to ED/HDTV output...
WAAAAY too long of a post!
Bart