Hi supermule,
If you encode a movie with overscan enabled then you will see the whole encoded image on an analogue device but you will see black bar on the right/left edges of the screen if you play it on a digital device.
So if you plan on playing your encodes on a digital device I would advise you to encode without overscan.
Overscan can be done in one of two ways: resized overscan or overlaped overscan.
resized overscan - You never loose a single pixel of your movie but you will have taller black bars on top and on bottom plus the left/right 8/16/24 pixels. In such case, use your TV functions to zoom the image on screen so that it covers the left/right black bars.
overlaped overscan - You always loose 8/16/24 pixels of your movie on the left/right borders but you don't need to use your TV's zoom feature to get rid of the black borders.
Choose the one you like the most.
I hope I didn't forget of mentioning anything

Cheers