8300 upgrade from 8000-format issues

[pdtricn]

I just upgraded my HD DVR from 8000 to 8300 model. I use cable, have 3:2 Sony XBR HD tube TV. I find the 8300 has a clearer picture on the non-HD channels, is faster, and alphanumeric search is a great feature. However, the screen format output format through DVR/tuner on the regular stations is diconcerting because when the DVR is set to standard aspect ratio, stretched or any of the standard aspect (3:2)output choices, the output appears to be widescreen, despite the icon showing it is 3:2 on the settings mode. So with my standard aspect TV, I get the horizontal letterboxes along with the side letterboxes(grayed out), so a much smaller picture! However, the HD stations are still outputting widescreen. I am using component video inputs for all viewing. I tried different settings and found when I set the output to 720p, then the standard channels filled the screen, the way I wanted it to be, that is 3:2, and the HD stations still had the 16:9. I couldn't notice any degradation in quality on that setting on the HD compared to 1080i. However, I wonder if I'm not utilizing the best picture output for HD then. Anyone else notice this, as I wonder if it is possibly a defective DVR. It seems odd the "default" output shrinks 3:2 image so much! My TV has no choices for input mode or aspect ratio.