I have a 16:9 HDTV, Why do I still have the black bars up and down ?

Your TV supports 16:9, but there are different types of widescreens

Cinemascope, Panavision 2.35:1

1.85:1 aspect ratio

(The above will cause black bars on the top and bottom of a normal HD TV)

1.78:1 (16:9) aspect ratio (Your TV)

1.66:1 aspect ratio (This will cause blackbars on the side of a normal HD TV)

Then normal TV (Bars on the side.)

Standard TV, 1.33:1 (4:3) aspect ratio

Since theatrical widescreen is wider than HDTV, it is up to the producer of the program to decide what to do about it. Some will cut off the sides of the picture so that the result will fit the 16:9 screen fully. They may even use a "pan and scan" approach (similar to that used to fit widescreen material on the standard 4:3 screen). However, the trend is toward showing films in their "original aspect ratio" (OAR) in order to not cut off any of the image and preserve the composition of the picture. To do this, the picture height is reduced, leaving the black bars top and bottom.

You know it's an HD signal when it's in 16:9 ratio. However, most signals are broadcast in 4:3. So you will have the vertical black bars on the sides. There is nothing wrong with your TV. Check your manual, you might have an opion to change the picture size to stretch the picture to where it will be in a "stretched" 16:9 format.