I have a 50" Panasonic with an upconverting DVD player hooked up via HDMI. When I put in a widescreen DVD, no matter what format I select from the DVD player (720p, 1080i), it still has small black bars at the top and bottom. I can change my TV to "Just" mode to fill the whole screen, but that makes the picture look funny. Should I expect a widescreen DVD player to fill the whole screen on my TV if I have an upconverting DVD player. Am I doing something wrong?

aspect ratio, google it.
movies on dvds have different aspect ratios. to fill the normal 16:9 screen look for the aspect ratios on the box to be 1.78:1 that equals 16:9 so it fills the screen properly without any faux stretching that gives you the funny look.

the ones you are watching are different aspect ratios such as 2.35:1? and that is what is giving you the black bars at top and bottom of the screen.