True for 4:3 images, but NBC is broadcasting more of its SD content in a 16:9 letterbox, so you would actually get a bigger image on 26", 16:9 HDTV. The same is true for anamorphic widescreen DVDs.
I strongly suspect that the 2007 deadline will pass without happening.
As for the upcoming deadline, it only requires over the air analog broadcasts to end, and all television broacasters to broadcast their over the air signals in digitial. Digital broacasts can be SD or HD. If you are using cable or satellite, you are not using analog over the air broadcasts, so it does not matter. Nothing will change for you.
Current digital TV broadcasts are the best kept secret in television. First of all, it is free. Second, the support for multichannel broadcasts means a single station can broadcast two, three, or even four streams. Back during the NCAA playoffs, the Altanta CBS affiliate simultaneously broadcast two different basketball games, one in HD, and one digital SD.
Most digital TV receivers can downconvert the signal to display on an SDTV.
Plus the government is required to give a free converter to anyone who doesnt have an HDTV
The whole subject seems anaphoric to me; who wants to look at black bars?