Spoiler: |
If narrower than 16:9 ratio then I believe you should do A x 720p where A is a number <1280 to create borders at the side. ie. 4x3 old-school TV would be 960x720 aprox.
If wider than 16:9 then I believe you should do 1280 x B where B is a number <720p. This will create borders top and bottom. ie. Star Wars would be 1280x500 approx.
This creates the illusion of black bars being encoded without actually adding the black bars. That's what leaked torrents and rips do.
But the better quality from the extra 48p isn't a problem really, and video scales fine on a PC between 1280 and 2160 so sticking to 720p/1080p is not really necessary. It's not like the old days where going above 480p (NTSC) or 576p (PAL/SECAM) would fail on a DVD/TV.