I assume that this is a 16:9 TV. Make and model would be useful. Set the 6131 to 16:9 and then press the * key on the BTV remote repeatedly to cycle through the STB stretch modes to get what you want on the TV. The TV should not be doing the stretching, so you may need to run through those stretch modes to make sure it's not "fighting" the STB (ie zooming in).
BTW, since you have an LCD, there is no reason to stretch 4:3 programming, so I recommend watching 4:3 as 4:3 and 16:9 as 16:9 for the best picture quality, without any distortion and yes, you will have bars on the sides of 4:3 programming.
The 6131 will remember the stretch mode for SD channels separately from HD channels, so you'll need use the mode you like for both, however, Normal is probably what you should be using. 720P is usually the best output format as BTV sends all signals as 720P and this will then minimize the number of format changes.
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http://www.digitalhome.ca/forum/showthread.php?t=57741