As far as I know all LCD use square pixels, so letterboxing is needed to achieve the correct 16:9 aspect ratio on a 1280 x 768 panel.
Another common non-standard aspect ratio found in LCD monitors is 1280 x 1024. The given aspect ratio is 4:3, but the actual aspect ratio is 5:4 (or 1.25:1). This means that if you set your PC's graphics card to a resolution other than 1280 x 1024, everything will look slightly stretched vertically. Again, to get the correct aspect ratio on full screen 4:3 video, slight letterboxing is needed.
I've no idea what the reason for this is. There certainly are true 16:9 and true 4:3 LCD TVs and monitors out there, but 5:4 and 15:9 ones are probably more common.
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