This is how I achieve a somewhat professional look using iMovie alone.
I forgot to mention to add a vignette to your shots! Double click your clips, click video effects, and choose vignette.
Also, when you create the letterbox in Photoshop, the aspect ratio is width: 940 pixels, height: 540 pixels.
This letterbox method does not work in iMovie ’11! This link will show you how to get the letterbox effect in iMovie ’11:
Music by JeJuin: