Most if not all newer HDTVs have a stretch mode to help SD content fill the screen. While it's not ideal, it may look good enough once you get the PQ settings adjusted to suit your taste. It's hard to say whether or not you'll truly be dissatisfied since it's really a matter of personal preference. IMO such a situation is better suited for a modest sized HDTV like your 32". Start increasing the pixel size/stretch out the SD content more (on larger 42"+ panels) and the imperfections quickly become more noticeable, even by the novice/very casual HDTV viewer. Also, viewing distance plays a bit of a role here. Think of a guy sitting way across the bar at a SD broadcast of a baseball game on a 32". He won't really see all the imperfections of stretching the SD content that you might notice from 7-10'.
Does your basic cable package also give you the local channels in HD? That would improve things at least a little.
I am thinking about buying a 32" Samsung LN32A330 to replace my standard analog TV. I only have basic cable. No cable box/satelite receiver etc. I'm not expecting the picture to be any better on the HDTV because the sourcew is no better, but I am wondering if the TV will compensate for basic cable and show the basic cable picture on the entire screen and not cut it off on the sides when not in HD.
The HD will be great for watching movies and playing games on the PS3, but wondering if we will be dissatisfied viewing analog cable on an HDTV.
Thanks for any replies.