If you're using the included Windows Media Player 9, then no it doesn't stretch videos full screen. Silly huh? But Windows Media 10, recently released can, so hopefully HP will offer an updater at some point.
But there's hope: get the excellent free BetaPlayer which can play many different video formats including Windows Media movies (ASF and WMV) with a plugin available on their site. It's mentioned in our hx4700 review, in fact. Get what's labeled as the latest "unstable" version because that's the VGA compatible version. And also get the Windows Media plugin. http://betaplayer.corecodec.org/
-------------------- Lisa Gade Editor in Chief, MobileTechReview