It depends. If the game or DVD does support 16:9 that´s clearly the better mode. If 16:9 is not supported by the DVD or anything you want to watch in TV, then most TV sets are able to digitally emulate 16:9. In this mode the quality of the picture could suffer (but Sony TV´s usually emulate pretty good). So if your DVD or game doesn´t seem to support 16:9 (I don´t know about PS2, maybe all of the games support it?) you should consider 4:3 if you have a feeling that the picture quality suffers in emulation.
I have a Panasonic Flat 16:9, and whenever it is available I choose 16:9 over 4:3.
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