Some have asked about viewing their video with the letterbox option or the stretch option – it’s really up to you. The “proper” thing is to letterbox. That’s what movies did before widescreen TVs came around a few years ago. The letterbox option keeps the image itself true in terms of the aspect ratio.
However, some like to watch video with the stretch option. With this option, the people are slightly tall and skinny (or short and fat), but for the eye it may not be as annoying as the bars on the side.
As far as your editor goes, it does not know the difference in the output video. Both letterbox and stretch videos are the correct sizes for the format select. Try out both and see which one works best for you.