Handling of letterboxed (not anamorphic) DVD rips

As Joey said, the “cropping” effect is caused by overscanning the video picture.  Overscanning is a slight enlargement of the picture so that a small percent of the entire picture is beyond the viewable display range, (and therefore it appears to be cropped). 

Why is this done?  Because in the days of CRT-only TVs and broadcast TV, (and even today) TVs overscan/enlarge the picture for display to move the syncing signals riding on top of the broadcast picture so they are moved off-screen and they don’t show up on the TV screen.

WIth today’s HD TVs and HD videos, we want to see the entire picture if possible and why some newer TVs allow adjustment of the overscan feature, (i.e. it can be turned off).  My Panasonic Plasma has this kind of control.  It is buried deep in one of the Picture internal controls accessed by the remote.  Here is a screenshot from the TV user manual explaining how to use the control for my TV:

You can see from above that the picture displayed can be either 100% size or 95% size.  I have my control set to 100% size so there is no overscanning taking place.  With this setting, the only time I can see any of the syncing signals(“noise”)  is on local TV broadcasts of news, weather, sports, etc. although on most channels this isn’t even visable  Since the control affects ALL signals sent to TV, I want my TV to especially not overscan my non-broadcast signals, and therefore have my TV set to 100% picture from all video sources

Search through your TV manual or remote control adjustments to find a similar control (perhaps with a different name) to adjust your TV’s overscan feature.