I'm sorry I missed this discussion. I just went through this problem myself (PS2 w/ component hookup to a Samsung TXN3098WHF).
Turned out the option I was missing is only found when the PS2 was paused during playback of a DVD. The instructions for setting 16:9 to widescreen are located in the Sony PS2 DVD Remote Control
manual.
This is confusing because the settings that have been mentioned already are for the PS2 console itself. The official PS2 DVD remote (and included driver) have their own settings. That's why you have to have a memory card plugged in to play DVDs, so the PS2 DVD driver can save and retrieve settings specific to the DVD driver software.
Oh, well, if it's still bugging you, give this a try. It worked for me! Though I was bummed that LotR: Return of the King was still letterboxed to preserve the extrawide aspect of the theatrical version. I was trying to figure out why every other widescreen movie looked fine and yet Return of the King was letterboxed, then I read that caveat in the small print on the back of the case...