To get rid of the bars correctly, you do need a scaler. Some people use the zoom on the lens of the projector to enlarge the image to hide the black bars. However, this method does not reclaim the pixels that are lost with the black bars. Besides, the Z2's zoom range might not work anyway.
I do believe there are a few DVD players that will achieve the stretch, the only one I've heard about is the momitsu v880 with latest firmare.
There also some projectors that now perform the stretch, some of the Infocus models, and the newer Z4 and Panny 900 I believe.
Now some DVD players also have a Zoom feature, but my experience is that you do lose quality, and those types of zoom's stretch the image both on the top/bottom and the sides.
I have not tried the Oppo, I got the panny based on good reviews on AVS forum, but the Oppo has good reviews as well. One problem I have with the Z2/S97S combination is called overscan via DVD/HDMI. I think this is normal and not just based on my equipment. But when I watch material via HDMI/DVI I get overscan, basically a 5-6 pixel border all around the entire image. Some projectors, especially the new ones have overscan adjustments. I know TheaterTek DVD software allows you to fix this issue as well.
I know some people have mentioned that anamorphic lens will soften the overall image, so far that has not been my experience. I've talked to Panamorph, Isco, and Prismasonic owners and they all say the notice an increase in brightness and picture quality. The reason, when you watch 2.35 movies with bars, your missing out on 33% of the pixel panel. If you scale the image to make use of those lost pixels, I've been told you gain upto 20% in image brightness.
If your screen is big enough, maybe the black bars aren't that big of deal. If you have it setup with the correct throw distance/zoom combination, you might be able to just zoom in /out on the projector lens to get rid of some of the bars. Of course, this is a manual operation and if you projector is ceiling mounted it is a pain...
