Sometimes you don't have a choice, the Horizontal width is pretty much fixed so you have to stretch the vertical to fill the screen, that's the way i do it.
Some models have the option of doing 4:3 or pressing a button and filling the screen.
I don't know how all of them do it but for instance the Stromberg Carlson "Opera Glass" button Zooms the picture cutting off the sides slightly.
I know some of the Zeniths have an expansion feature but I don't know if it's just the height or width too.
On a 10" screen you don't really notice a little vertical stretch unless a round object is shown.
This Teletone is an example, at 1:19 there's a circle that's slightly elongated but it's not really bothersome:
http://www.youtube.com/watch?v=EykM_lam17c
One thing for sure, they built Portholes so they could have more square inches of picture, it was not intended to have blank areas top and bottom.