First things first: Not sure exactly what you had in mind the final show would look like, but if you want to reconcile two different aspect ratios, you will always either have black borders to fill in missing image information or you will have to sacrifice part of the image in order to reconcile the two different frames. So, when playing a 4:3 show on a 16:9 widescreen TV, you'll either have black borders on each side or the TV/DVD player will crop into the image and you'll lose some image information at the top and/or bottom.

I understand you're probably referring to the PhotoStory program feature to automatically adjust imported images to 16:9 ratio (in the "disc project settings"). That function will basically do exactly what I described above and cut off some image vertical information, so the 4:3 image will fill up the entire 16:9 frame without black borders left and right. Your advantage when compared to the automatic cropping your TV/DVD player does: You have better control over what parts are cut off by using the "Image size and position" function on each image to move it around on the vertical axis and manually adjust where you want the program to cut off image information.

If you decide to go down this road for an existing project, this is what you need to keep in mind: After loading the project back into the program, go into the disc project settings "E" key and enable the two checkboxes relevant to the 16:9 conversion. At this point, the settings will only apply to new images you import into the project. The existing images in the project won't automatically be cropped bit will be displayed as 4:3 in the 16:9 preview monitor with black borders. You'd need to right-click on each image in the arranger (in timeline view) and tick the "16:9 adjustment" option. If you find with any of the images that the automatic cropping produces a bad result (e.g. cut off heads), right-click on the image again and use the "Image size and position" dialog to move the image up and down within the 16:9 frame to find the appropriate section of the image that you want to show.

This might be a good deal of work and manual adjustments for a bigger slide show, but if you want the best results, you might want to invest the time.

I hope this helps.