By doing this you are only using roughly 2/3 of the pixels to display the image the rest are still displaying the black bars, though they are zoomed outside of the screen. This is supposed to hurt the overall contrast ratio of the picture in 2.35:1. If you mostly watch 16:9 material then it doesn't matter. If you mostly watch movies (most of which are shot in 2.35:1) then it is more of an issue.
The Dvision projector puts 2.35:1 movies as more important than 16:9. The 16:9 material will have black bars on the sides and should have a loss in contrast ratio compared to a native 16:9 projector of the same specs and size of image.
