For the record, Tod's problem has been solved. The answer came from a helpful person on the forums at www.hometheaterspot.com .

It turns out that the Playstation has two separate settings for 16:9. Tod was setting the one for video games, not the one for DVD playback.

In order to get the options for DVD playback on the screen, you must play a DVD and then press "Stop". Then go into the DVD playback options (different from the general options) and set the feature.

I didn't actually witness this, so I might be getting the menu names wrong. Those were the approximate instructions given at the Spot, and Tod said it worked for him when he tried it.