I burned your test file to a DVD and watched it on my TV last night. I haven't seen a lot of the transfers here, but yours looked pretty good. The overscan on my TV completely ate all of the border on the right side. Only a small part of the black border remained on the left. Apparently, my TV's image is not centered. I have a (crappy?) 29" Zenith from '97.
If you crop the image to eliminate the borders, won't you in effect be zooming in on the image? Won't that make the limited resolution of the laserdisc more apparent?
Also in your test file, I noticed for 3 or 4 seconds at the beginning there was a lot of signal noise in the starfield. After it went away, the starfield looked very clear though. Don't know if anyone else experienced that.
I say, go with the TV friendly borders.