Also your cropping isn’t working because you would need to crop the left and right sides to squeeze it onto your 16:9 monitor, meaning losing actual video.

…that is exactly my intention, to “mutilate” the video by cropping the sides and the remaining image filling the whole screen. I prefer watching films this way at home rather than watching the wide screen version. Only very rarely I watch them wide, if the film really benefits from seeing the sides.

And it seems to me that VLC is unable to do this on letterboxed videos. My conclusion is that this version of Star Wars works only if you want to burn it on Blu-ray. Or watch the widescreen version. Downloading this version and then wasting time on trying to figure out the cure really spoiled the viewing experience, I wouldn’t recommend this version to any casual viewer who just wants to watch the original once, which is majority of people really.