Confused about 16:9 widescreen on the PS2!

what ive noticed with the 16:9 netting in the PS2 bios is that it just adds black bars covering part of the screen its not actual 16:9 in any way
and when your back on the main menu with FMCB installed part of the menu is covered by the black bars

 

I was always confused by this too, but I believe it was just Sony's way of showing you were in 16:9 mode on the menu - rather than doing something sensible like reformatting the menu for widescreen proper. As people have pointed out though (and it was surprising news to me), a very small number of games actually supported the BIOS setting - many just supplied their own options for widescreen modes - and in a few cases it actually hindered rather than helped.

 

It's a setting for the zoom option of your TV.
If you zoom in on an image to get the full width you lose top and bottom part of the screen.

Hence, "16:9" setting just moves the cropped text more to the center to be visible.
Nothing special is going on, and it's not a signal change in any way.