depends what DVD program you use, PowerDVD can reconfigure the picture to a number of different screen sizes but as was mentioned before, you really dont want to mess with the native DVD resolution too much or it starts to look crummy.
Also, look on the DVD itself, some DVD's have widescreen/letterbox AND Pan&Scan/Full Screen versions, it is just a matter of selecting which format to play.
Some DVD's have only Full Screen, example: Simpsons Complete First Season DVD Set, there is no letterbox format to "The Simpsons", it will only play in full screen.
sorry if I make no sense at all but hopefully you get the point.