In my case, there's no contest. I much prefer watching the GOUT DVDs over the SEs. I don't care how much better the quality of the SE DVDs are, I refuse to watch all of the CGI crap added to the SEs- it distracts me much more than the non-anamorphic quality of the GOUT. Everytime I see Greedo shooting first, or that dinosaur thing obscuring a droid, or the rings around the death stars, or the little shop of horrors head coming out of the sarlaac pit, or Hayden Christiansen in place of Sebastian Shaw- my heart sinks.
FWIW, my niece just got a 32" widescreen LCD and everything looks awful on it. She doesn't have any HD signals yet, and so far all standard def programming looks horrible. That's why, if I can still find one, I'm going to buy a tube-based HDTV. They're much more forgiving when it comes to standard-def material (ie- all DVDs and SD cable).