1366x768 monitors provide native 720p (1280x720) support. The area outside the 1280x720 is what's known as overscan and it's contents aren't displayed on screen. The reason why 768 vertical was chosen was that WXGA (Wide XGA) monitors had a 15:9 aspect ratio, in order to get this to support the TV aspect ratio of 16:9 they made it slightly wider resulting in a resolution of 1366x768.A question - Does a native 1366x768 LCD do any scaling to the 720p signal?
As for the overscan, TV's need to provide this to maintain compatibility with pre-digital technology, old CRT TV's throw away as much as 3% of the picture edges. Overscan is not necessarily a bad thing as the unused capacity is usually used by the "Vertical blanking interval" which can also be used to carry data such as teletext and closed captioning.