What do the ratios 16:9 or 4:3 mean?

Normally images or display screen are wider than they are tall. Our eyes work that way, we see a great spatial angle sideways than we see vertical. You can scale images to be anything you want with the appropreiate software just be aware that you can make the image look bad (tall skinny people or things). Most people crop images if they need to change their size preserving the image scale.

If you have a big screen TV, it is probably 16:9. Movie theatres are normally 2.35:1 and old fashion TV sets 4:3. In each case, the image is wider than it is tall.

When you see the following "this movie has been formatted to fit your screen" on a TV, it means the original 2.35:1 movie has been cropped down to 4:3 or 16:9.

Bottomline...when in doubt chose 16:9. If you have a 4:3 TV set and don't like letterbox, you can always format your home made movies to 4:3 but 16:9 is a safe choice.

If you want free software then I would recommend two programs. Gimp for images and handbrake for video files. Both have a learning curve but are powerful for doing the things you want to do. Free is a good way to start. iPhoto and iMovie can both do some limited stuff but apple paid programs aperture and final cut are the more powerful versions.

It's called aspect ratio. It is the ratio of width to height of a display.