Set the DVD player to "16:9 widescreen" and leave it there. At this setting, the player will output whatever is on the disc in whatever format it's been encoded. If the disc is enhanced for 16:9 display, use the feature in your new TV to get its full resolution.
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4:3 Letterbox and 4:3 normal
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There is no practical difference between these two settings. (There's a theoretical difference, but it's not anything you need to worry about.) Both of them will tell the player to downcovert a 16:9-enhanced image for display on a standard TV. The player downconverts by throwing away a big chunk of the resolution on the disc. But you no longer have to accept that compromise because of your new TV.
"Fullscreen" DVDs will look the same regardless of the player's setting. So there's no reason to change it.
M.