The difference between 4x3#1 and 4x3#2 should be pretty apparent on a 4:3 TV when you display HD material. If you "need" #2 and have #1 selected, the HD material will be full screen height instead of letterbox. Try selecting the Help box on the screen where you choose between them for decent info. What you see when you have 480i (SD) material as the source (SciFi, USA, ...) will depend on your TV which connection on the TV you select to view it. Some 4:3 TVs will automatically display it full screen eventhough it is coming on an HDMI connection at 720p/1080i. Some 4:3 TVs will display it as a postage stamp instead. If you have a 16:9 TV and are trying to stretch 480i material to fill your screen, it probably doesn't look so good. If the source isn't 480i, but happens to be 4:3 aspect ratio it can be Zoom'd to Full Screen with some loss in PQ on a 4:3 TV.