What am I doing wrong? I try to catch up with modern technology and I am disappointed. I assume it is just me. I bought a 32" HDTV. If we watch it in widescreen mode, it leaves a border around the TV so our 32" tv is not really 32 inches.
A few definitions to start, and then an explanation and recommendations...
"Aspect Ratio" - The relationship between how wide the picture is and how tall it is. Old (standard definition) televisions, and old (standard definition) television programming, were "4:3" (height:width). New (high definition) televisions, and new (high definition) television programming, is "16:9" (again height:width).
"Letterboxed" - This is what happens when the programming has a wider Aspect Ratio than the television screen. The result is black bars above and below the picture. This is generally the result when high definition programming is presented on an standard definition television.
"Pillarboxed" - This is what happens when the programming has a narrower Aspect Ratio than the television screen. The result in black bars to the sides of the picture. This is generally the result when standard definition programming is presented on a high definition television.
"Postage Stamp" - This is a casually-used term, referring to when a presentation is both Letterboxed and Pillarboxed. This generally happens when high definition programming is presented via a standard definition television station, but presented on a high definition television. The television station Letterboxes the programming, and then the television, figuring that it is standard definition programming, Pillarboxes it. Generally, this Postage Stamp situation can be avoided by the viewer. Since the programming is high definition, and the television is high definition, the viewer should watch the programming off of the high definition television channel. (Sometimes that requires an additional fee.)
Letterboxing and Pillarboxing are results of physical realities - round peg in square hole type of things. You can try to overcome these realities with Zooming, but it generally won't work well. If you zoom a Pillarboxed presentation, then you're telling your television to cut-off the top and bottom of the programming. If you zoom a Letterboxed presentation, then you're telling your television to cut-off the right and left portions of the picture.
If you have a Postage Stamp scenario, you may think that Zooming should work perfectly, i.e., nothing should be cut-off, since you have black bars on all four sides. However, the math typically doesn't work out that way. Beyond that, in Zooming the picture, you're going to exacerbate any of the imperfections added into the video in the two previous machinations of the video.
Our entertainment center can only hold a 37" screen maximum so I can't go a whole lot bigger.
We got rid of our entertainment center and just got a low credenza-like console. FWIW.
There is a button to adjust the screen size. When I do that so the whole screen has a picture, all the heads are chopped off.
My recommendation is to not mess with the Aspect Ratio. Leave it set to 16:9, since that's what your television actually is. Switch to high definition channels whenever possible, and live with the Pillarboxing when that isn't possible. A 37 inch diagonal HDTV is as big as an old 30 inch diagonal standard definition television, and that's not too shabby. It's better to watch that way than to have things cut-off, or distorted.
I am ready to hook up my old analog tv and take this one back.
That's not going to help you much. Very soon, everything is going to be Letterboxed on analog televisions.