Actually a letterboxed image is 16:9 video in a 4:3 timeline. The most common viewing of this is how a DVD displays 16:9 footage on a 4:3 TV.
With FCP you get a letterbox image when you drop a anamorphic asset into a 4:3 timeline.
So if you have a 4:3 video you apply a Letterbox mask which will cover up the top and bottom of the image giving you the 16:9 looking image. Under Effects>Matte>Widescreen.