The plasma you have will have a 16:9 ratio. The accepted "standards" for motion pictures will usually be 1.85:1 and 2.35:1. Some time ago, movies were released for TV/video using "pan and scan" to fit them into the 4:3 ratio. Your TV has a ratio that works for broadcast TV and and is close to likely motion picture ratios. I don't think you will find too many films "pan and scanned" for your ratio because it's pretty close and it doesn't effect the director's vision. If the black bars bug you, why not expand the image to fit on the TV? (you will lose a bit of off left and right). It's only one button on your remote control... If you were to fit the vertical you'd zap some of the horizontal. Why use all your cores to reprocess the image when the TV will do it.
If I've completely missed your point, sorry.
As for handbrake, I use the AppleTV 2 setup, store movies on an old iMac, and stream to everything.
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Rob
iPhone 4S, iPad 2, MacBook Pro (R) 16gb, 250SSD
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