Good observation. If you compare enough old 4x3 transfers of widescreen movies to the correct aspect ratio versions (either 1.85x1 or 2.35x1, depending on the movie), you'll notice that the wide transfers don't always show more than the old ones.
Sometimes the wide transfers give you more horizontal information. Sometimes they give you less vertical information. Often they give you both. But however that breaks down, unless someone made a big mistake in the transfer, the wide image shows what was seen in theaters.
Here's what's happening:
A frame of film is actually pretty close to 4x3, and Hollywood uses a number of techniques to capture a widescreen image (either 1.85x1 or 2.35x1) inside it. More often then not, they frame the wider image inside the 4x3 picture. The extra image material on the top and bottom is cropped off either in the lab or in the projector.
That extra picture provides more leeway when trying to get a decent-looking 4x3 transfer. You can crop off the sides, open up the image vertically, or a combination of both.
Unless you're familiar with how a particular film was shot, it's difficult to say how much opening it up vertically will hurt the movie, or even if it's technically possible. In fact, this varies not only movie to movie, but shot to shot.
This story, "Why Do Widescreen DVDs Show Less Than 4x3 VHS Cassettes." was originally published by PCWorld.