It seems pretty clear to me from Simon's blog that they're handling the 16:9 conversion of The Wire with great care. I would, of course, prefer they stick to 4:3 as much as anyone, but it doesn't seem like they're doing the hack job that Buffy seasons 1-3 are enduring.
I'm kind of hoping that the broadcast version of The Wire HD will be 16:9 while the Blu-Ray will keep the original 4:3, but that's kind of a pipe dream, it seems.