I used to have two laserdisc versions of the sound of music. One was letterboxed and one wasn't. I would show people the artistic differences between the two by comparing one scene in the movie, and the case was made:
When she is singing the title song, there is a point where she runs through a stand of Aspens spanning the screen from left to right, with a brook running through the grass below. With letterbox, the aspens dominate the screen from one side to the other as she runs from one side to the other, and then back again, zig-zagging and frolicking through the aspens.
In "panned and scanned" full screen, the camera follows her through the aspens. It is all about keeping her center frame and the aspens - and their visual impact - are greatly diminished.
We don't have tv - we only buy and rent movies. After Chrismas we will be getting a small projection tv with hdtv capability and component inputs, and roll down screen. It is literally BETTER than the theater. That will eliminate the one problem with letterboxing - small size on a normal tv.
The classic example for me was on the Siskel & Ebert show where they were doing a segment on P&S vs. LB -- they showed "the" scene from The Graduate -- the P&S version completely cropped Mrs. Robinson from the shot.