I was using a program called ZoomPlayer to get rid of the black bars. It is free for the standard version. All you need to do is open the movie VOB files off the DVD, and use the correct settings to get rid of theblack bars. It really does look fantastic!
No, it simply cuts of a small part of the side so that it fits. It is not stretched at all, simply "zoomed"! It is great. I use it to play episodes of Enterprise that I have on my computer. They look great.