It all started before HD was widescpread and Fox upgraded their infrastructure to digital while everyone else was still using the older equipment. They were able to do this because they were a younger network and didn't have as much legacy equipment to replace. By the time the rest of the networks were upgrading to HD, Fox held out explaining that they were already digital and that most couldn't tell the difference between 480p and 720p and thus Fox Widescreen was born. Fox would advertise that their programming was available in "High Resolution digital TV" . Of course every self respecting HD fan balked at it and demanded HD.
In September of 2004 we got what we wanted and Fox broadcast the first national HD programming, it was the opening of the NFL season. It wasn't pretty at first, but it was better than Fox Widescreen. We quickly realized that Fox Widescreen was here to stay, many of the Fox shows were still not HD. Even today Fox still shows shows like COPS and So You Think You Can Dance in Fox Widescreen. They also show ALL their commercials/Promos and studio shows like the NFL Pre-game and Fox News Sunday in Fox Widescreen. This still fools some people and they think it is HD, but it isn't.
Maybe Fox was right and most people can't tell the difference between 720p and 480p.
Remember that not all widescreen TV is HD and not all HD is widescreen.