Letterbox on 720x480 Movies

All of my movies that are ripped from DVDs at 720x480p play inside of a letterbox (black bars all around) on the Xbox 360 app. The source videos do not have any black bars and the videos play fine on all other devices (PHT, PMP, Win8 app, several Roku models, Android). In order to fix this problem on the 360 I have to change the quality of the video to 480p and then it takes up the whole screen on my 1080p widescreen TV. But then the next time I play a 1080p video on the 360 the quality is set to 480p and doesn’t look so good so I have to change it back. I want to be able to just set it to 1080p (the resolution of my TV) and have Plex just figure out what to do with the size/shape of the video. Is that possible?