No, the xbox does not auto upconvert to 1080i unless your tv specifically supports that.
Yes the crop of HD xbox games for some reason is using 4:3 instead of 16:9 but I know Dragon's Lair 3D supports widescreen in all formats of HD including 720p and 1080i, as well as Street Hoops. I guess just Soul Caliber 2 chose 4:3 for some stupid reason. It's possible, and the newest linux about to be released for the xbox will support all HD resolutions as well.
Yes the crop of HD xbox games for some reason is using 4:3 instead of 16:9 but I know Dragon's Lair 3D supports widescreen in all formats of HD including 720p and 1080i, as well as Street Hoops. I guess just Soul Caliber 2 chose 4:3 for some stupid reason. It's possible, and the newest linux about to be released for the xbox will support all HD resolutions as well.