That's "Original Aspect Ratio" -- the size the movie was originally (or intended) to be shown in theaters.

Letterboxing vs. Pan and Scan:
If you don't understand the reasoning behind letterboxing, try this. What's the size of a television screen? Square (ish). What's the size of a movie screen? Rectangular.

Now, how would you fit a rectangular movie fit on a square(ish) television screen? You'd make it smaller to fit within the available space.

"I hate the black bars!"
What you should realize is that they aren't covering up any of the movie. If anything, when you watch a movie on television, you're usually watching a movie that's cropping off the left and right sides.

You should ignore the black bars. If you cannot, the best solution is rather simple: Turn off the lights in your television viewing room*. Close the curtains and the blinds. You won't see the black bars, and you won't know they're there.

-Faux "friendly neighborhood home theater enthusiast" Pas

* Some people will find that watching a movie in total darkness produces eye strain. The best solution is to have a dim light on behind the television set. If that's not possible, a dim light should be on somewhere in the room.