A letterbox movie viewed on a conventional tv will have black bars on the top and the bottom of the screen which means you are not missing part of the movie.
When it is stated on the back of a DVD that the movied has been formatted to fit your tv it means the movie has been put through a pan and process. This means you are not seeing a considerable part of the movie that you would have seen had you seen it in a theatre.
If you were to watch "How The West Was Won" which was filmed in cinerama and it is being shown in the pan and scan process, then you are missing approximately two-thirds of the movie.
Check out this site for an explanation of widescreen:
[www.widescreen.org]
Check out this site for an explanation of pan and scan:
[en.wikipedia.org]