question about scalers

I have a problem that nobody else seems to have.  I'm thinking about 
getting a bigger HDTV, but I have a lot of old SD and VHS-quality 
material, which looks blurry when viewed full-size on a large screen.  
Is there any way I can shrink a video picture so that it occupies less 
than the full height and width of the screen?  In other words, so the 
picture has black bars all around-- letterbox AND pillarbox?

Ideally, I'd like to be able to view widescreen movies and other HD 
material on as large a screen as I can afford, but that makes my old 
material look blurry.  And no, I don't want to throw away the old stuff.  
Much of it is simply priceless-- that is, I can't replace it at any 
price.  

I've been looking at specifications for video scalers, but as far as I 
can tell, they provide only the standard presets-- fine for upscaling 
480-line stuff to full-screen on a 720p or 1080p monitor.  I want custom 
settings that would let me, for example, display 480-line video on the 
middle 480 lines of a 720p monitor.  Are there scalers that can do that?  

I'd be grateful for any information. 

Cheers!
- Allen