I've tried pan and scan on four different PS2s with 3 different connections (Composite, S-Video, and Component), on 5 different TV's of varying brands. The PS2's ranged in age from launch, 3 months ...
According to this, I need to hold down Triangle + X at some point when I start up Burnout 3 to enable progressive scan, and that seems to be the standard way to enable progressive scan on PS2 games.