ScummVM found that you have old saved games for Broken Sword 1 that should be converted. The old saved game format is no longer supported, so you will not be able to load your games if you don't convert them. Press OK to convert them now, otherwise you will be asked again the next time you start the game.
The game originally renders at 640x432 which is then presented letterboxed at 640x480. Enabling this option removes the forced letterbox effect, so that the game fits better on screens with an aspect ratio wider than 4:3.