Do plasma TV's automatically adjust non-HD channel to 16:9 format?
Answers: Scaling has nought to do with Plasma, LCD, DLP, etc.
All HDTVs hold options to scramble SD channels to pack the screen.
Yes, its a setting on the HDTV to stretch the 4:3 dummy to fit the 16:9. Normally the settings are "Wide" or "Full" to stretch the image for the full eyeshade effect. Of course you can always own it on the "Normal" setting, which will show a 4:3 image surrounded by the middle of the 16:9 display.
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