I realise that the frame height is different between NTSC and PAL
There is NO difference in frame height between PAL and NTSC 720p and 1080p
The difference in frame height (Aspect Ratio) depends on how the Video created (eg. what camera was used or what aspect the director prefers)
letterbox is not an ideal way to watch something
Gonna disagree with there (and probably millions of others) Letterbox is the ideal method (because it’s not altering the picture)
When you “Pan & Zoom” you’re losing picture information (cropping) and resolution (zooming)
Anyways, back to the question … the is no automatic pan & zoom (for automatic the WDTV would have to do calculations on the resolution and adjust. Since the WDTV can’t even read forced flags in a video file … then i would say not even remotely possible)
Doesent your TV have Aspect Ratio options ? any Digital TV will have them, which you can leave on.
eg. 16:9, 14:9, Just, 4:3, Zoom1, Zoom 2, Zoom 3