developpers need to implement some mechanism to deal with overscan. it doesn't just work out of the box well it does actually with sdl but then u have the part that gets cut off like ure all saying here.
What i do with my games is first detect if tv out mode is on or not and if it is i create a screen surface of 360x288 and. (the normal screen size is 320x240) so there's about 40 extra pixels to the left top right and lower of the screen. Now if overscan occurs and it probably will, i have options where the user can hold R and press a direction on the joystick while being at the titlescreen and the screen (320x240 surface) will move in that direction (/will be blitted on the bigger surface but at another start point). This mechanism is basicly the same as the options u have in the settings menu with tv out.
If developers don't implemend this kind of mechanism u'll get the screen being cut off with standard sdl applications.
someone on irc explained this once to me i think it was woogal so that's why u'll find this functionality in my games

it works great with my pal tv, i can't test it on an ntsc tv doh if someone would like to try it out