My Hitachi rear-projection HDTV does exactly this.

So does my Mits RPTV. The only problem is... When you tune in to HBOhd and they're showing 4:3 material on the channel, HBO broadcasts black side bars. Watch enough episodes of Six Feet Under on HBOhd, and you've got burn. Also, my HDTV decoder box has a nice feature where it upsamples NTSC pictures from my satellite dish, but it too uses black side bars to do that. So even if your TV does gray side bars, some of your other equipment and/or broadcasters might not.

I think a cool feature of a CRT projector would be to detect black bars and just overlay them with gray ones.

The anamorphic stretching modes are awful.

Unless of course you're watching an anamorphic DVD, in which case they're awesome.