Ok did some testing. Not the results I wanted though.
I have about 25 menus in a project that have a round clockface as a button. I created these menus in photoshop about 2 years ago and of course technology has changed which is why I would like to redo them to the widescreen format. I cant get my head around how I keep the round button round when on the widescreen format. I did a test that put in a 4:3 menu but checked the 16:9 button in encore to stretch the menu out. I also stretched the menu out in photoshop to the widescreen pal template, but when I played them back on the tv the round buttons were oval in both widescreen and 16:9.
Do I have to completely redo the menus from scratch so the buttons stay round.
Considering that a wide screen is exactly that, wider than your standard 4:3, you'll have to do some kind of padding somewhere, somehow. The easiest way that I can think of is, in Photoshop, start with a new document that's 16:9, then open your old menu file and drag-n-drop it onto the new document. You'll have to fill in the blank areas.
OR, you can resize your 4:3 menu to fit the 16:9 screen left and right, but then you'll be cropping top and bottom. Your choice.
Either way, I wouldn't simply stretch your current 4:3 menu for reasons you've already encountered.
That is the conclusions I have come to. When I did some more testing using a new widescreen menu created in cs2 with some round stuff on it. When played back throught the 16:9 setting on the tv all was well.