hi--i just was facing the same situation--i have an xbox and i decided on a 16x9 mits 55809. some games look great in widescreen; others look better in 4x3, but lemme tell ya: 16x9 is the wave of the future, and if you watch dvd's it's like a religious experience.
also, beware the fact that when you blow up some of those games, the jaggies are blown up too, and are there clear as day (JSRF, raise your hand!)
my 2 cents
Hey go with 16:9 , it's the only way to be, I have a 65" and the xbox games are crystal! Make sure you get the component connection, a lot of xbox games (if not all) are in dobly digital, and if not DD they are multi channel format, so you must have the component connection. Halo is in 480p and madden and it's the beautifullest thing you can witness with a game console that I've seen so far man, I love it!!!!!!
So is it true that there are only a small percentage of xbox games that are designed for widescreen and the rest have to be stretched? If this is true, then the 4:3 is the better option IMO right now. If the future is dominated by 16/9 then I will go for the upgrade.
480p wisescreen Xbox games look awesome, and true 1080i games are reportedly on the way. Go widescreen for sure! Besides, you also get to watch anamorphic DVDs! It's a win-win situation.
As far as 4:3 games being stretched... I don't mind it. The main reason is that stretching a created graphic doesn't look near as bad as stretching an image of something real. You know what a real face looks like and you can tell when it's been stretched. If you're looking at an animated object, a slight widening does not make it look unnatural, IMHO.
I have to agree with Mark. I'm using a AE100 and I've played many of hours on non 16:9 games, i.e. Halo and PGR. It never bothered me that they weren't 16:9 since as Mark said, it's not as bothersome as watching cable TV stretched. I did try a couple of times to watch it in a 4:3 window but found that I missed the full screen look and quickly switched it back. Even if you didn't have an Xbox, why would you want to purchase a 4:3 TV? You would definately benifit from both DVD's and HDTV.