allstarnz: it's odd the new Sky Pace boxes don't have an option like 'always 16:9' (which most Dreamboxes have). This means that channels like Sky Sport will be proper widescreen, while other channels like ESPN will have the pillar box on them. That will work for all outputs. As long as the broadcaster sends the AR flag, it works perfectly.
I thought that was how they work or my one does. The TV auto switches the aspect ratio depending whether it's 16x9 or 4x3..