What Anamorphic 1x3 accomplishes is rather hard to explain if you aren't familiar with the way DSLR's shoot HD video on their much higher resolution still photo sensors. Basically, when shooting video still cameras combine or "bin" three pixels horizontally and skip two out of every three pixels vertically. Skipping increases the probability of aliasing and moiré. Why not bin vertically? Well, the 5D3 is the only ML supported camera that does that and it does improve the video quality. However the smaller, less expensive cameras skip vertically. What the Anamorphic (a.k.a. 1x3 sampling) setting does is to keep the horizontal binning but use all of the vertical resolution available on the sensor. Yeah, I know, why not use all the resolution both vertically and horizontally? Because that's just too much to process in camera and write to the SD card.
A benefit of having high vertical resolution is when using Dual ISO. Dual ISO can lose up to half the vertical resolution and is susceptible to aliasing but since you are starting with three times the vertical resolution, well you get the idea.
If you process Anamorphic Dual ISO through an MLV app that doesn't adjust for these settings it will look like this:
As far as what it does to the LiveView, you can choose between proper framing but in black and white at a slow refresh rate or a distorted stretched image in color. There is a way to "rewire" the LiveView to give you a better image for framing. This is still rather experimental and isn't working on the 700D -- yet.
