I don't believe the set has a true anamorphic squeeze mode...
If the set offers the option of 16x9 mode with gray bars, the set is definately NOT doing a true squeeze (at least for that mode), as it needs to scan gray above and below the 16x9 area. However, it's 16x9 mode with "black" bars may be an actual squeeze, but probably only for 1080i material. I'd be willing to bet that all 480P material is restricted to the pseudo 16x9 mode (4x3 with bars).
If a 4x3 screen has grey bars above and below the 16x9 area, the set can't be doing a true anamorphic squeeze, as not all of the scanlines are being forced into the 16x9 area - Those grey bars must be scanned by the CRTs, which means less resolution for the 16x9 area - 33% less.
A set that truly squeezes, cannot have gray bars, as there is no scanning in those areas - and therefore, are black void areas.
The grey bars used by the Hitachi may help offset uneven phosphor burn, but at the cost of resolution for the 16x9 area. The Hitachi is simply down-converting 16x9 material to display correctly within a 4x3 area, and adds the grey bars above and below the down-converted image. This means a loss of 33% vertical resolution - The same as if you were to let your DVD player down-convert by selecting 4x3 letterbox mode...
While the Hitachi DOES use 1/4 (not 1/3!) of it's resolution to place gray bars on the screen, it's overall resolution is 1080 lines. This still leaves 810 for actual image between the gray bars.
By setting a DVD player to output in widescreen mode and turning the squeeze on, the entire signal from the player to the TV will be picture. So the TV will have 480 lines of resolution from which to fill the center 810 lines on the screen.
If your DVD player is set to output in 4:3 mode and the squeeze is off, 1/4 of the signal from the player to the TV will be black bars. So now you're only getting 360 lines of picture to the TV, which it will use to fill the same center 810 lines on the screen. The top and bottom of the TV will now be black from the DVD signal instead of grey from the burn-in protection.
I hope this is clear (but I'm pretty sure it's not).
I've had this set for several months now, and it is awesome for anamorphic DVDs. And yes, Aspect 5 is for 1080i/540p signals only.