Make sure you have properly calibrated the brightness/contrast to "safe" settings. This can be easily done using DVDs like Avia or Digital Video Essentials.
The presence or lack thereof of "black bars" has to do with the aspect ratio of the movie. Some movies, with ratios of 1.77:1 or 1.66:1 or 1.85:1 in anamorphic widescreen, will completely fill the TV. Others, like 2.35:1, will still have black bars at the top and bottom, because the director's chosen aspect ratio is still "wider" than your widescreen TV.
DVDs are inherently only 480, at least until HD-DVD comes out. Perhaps you have a DVD player that upconverts the signal to 720p or 1080i? Still does not affect the aspect ratio of the movie though...