I'm trying to understand, why is it if I have a 1920x1080 file and I convert it for SD broadcast to Mpeg 2 (720 x 480) with a 4:3 aspect ratio, it is letter boxed. But if I try to export that same footage SD broadcast to Mpeg 2 (720 x 480) with a 16:9 aspect ratio it is either window boxed or pillar boxed.
I'm bit confused because they say that all Hd formats are shot in a 16x9 aspect ratio.
The Second question I also have is if you broadcast one of the HD formats in HD on a High Def TV, will it be fullscreen or Widescreen.
Well, you are missing something critically important. The shape of the pixels.
A 1920X1080 frame uses square pixels. In a 720X480 4:3 frame they are rectangular in that they are taller than they are wide. In a 720X480 widescreen they are wider than they are tall.
If you export your 1920X1080 to MPEG2 (and I hope it is for a DVD because otherwise you should probably be using H.264) you should set the frame for Widescreen using a pixel aspect ratio of 1.212
You may still have black bars, just slivers really, on each side so you may want to "Scale to Fill".