@MUKUL and uLtRaMa6nEt1c
=> uLtRaMa6nEt1c: Yep! SD TVs resolution is 576 interlaced...
=> MUKUL: You know, mate, I too come from one of the "3rd world's countries" (Italy)... LOOOL!
From the day I bought PS3, I kept using my good old standard TV - connected via SCART cable - until 2/3 years ago, but I have to say the graphics quality was quite good, after all.
As for your problem, well, the point is that PS3 automatically detects the video source connected, so - given that the max resolution for a standard TV is 576i - you'll have no choice but using that resolution (4:3) and if you try switching to 16:9 the image will inevitably be stretched, because that way you're simply forcing the standard 576 signal to be displayed in 16:9 format...
Anyway, some standard TVs have the "progressive scan" option which allows them to display images also in 576p (4:3 and 16:9 "cinema" format) thanks to an integrated "scaling" module, but in this case you have to be sure your TV is provided with a Component AV connection.
So, if your TV has that option, you should be able to display 16:9 images without any distortion, by acting on the video settings of both TV and PS3, in order to find the right proportions for the images on screen... Keep in mind, though, that I'm saying "you should be able" because even in this case is not 100% sure you'll get the right image display: this is because there are lots of factors about the signal compatibility depending on the TV type and many other things...