Adjusting an SM124 monitor to reduce the borders is an easy thing to
do, but it does require a special plastic "alignment tool" which is
available at Radio Shack for about 99 cents.
There used to be an excellent text file on how to do the adjustments,
but I can't find my copy of it. Perhaps it's still available on some
of the atari.archive sites like umich or hensa.
Inside the SM124 are two small adjustable resistors (potentiometers) which control the vertical height and vertical linearity. You adjust the height first, then the linearity to give you a smooth, uniform picture again. Both adjustments interact a little, so you usually have to go back and forth a bit to get it right.
The width is controlled by a coil with an adjustable core which
screws in and out of the center of the coil (this is what the
alignment tool is for.. the hole in the core is hexagonal and the
tool has the proper sized hex head.. also, using a metal tool will
cause the picture to distort, making it really hard to adjust.. the
alignment tool is plastic.)
You just adjust the height and width until it looks right to you. You can make the borders as wide or narrow as you want.
There is also a potentiometer to adjust the focus. The SM124 doesn't provide a perfectly flat picture, and with the screen size increased, the difference in focus between the center of the picture and the corners becomes more noticable. You can adjust for a pin-sharp center, but the corners will be fuzzy (and vice versa). I opted for the sharpest focus a bit out from the center, which gave pretty good focus over most of the picture.
The thing to remember though is that unless you maintain the same perspective ratio as the screen starts out with, the picture will be stretched a bit.. that is, circles drawn on the screen will appear oval. This part never bothered me, but as was mentioned, if you're doing something like desktop publishing, the picture on the screen won't match the printout.
As for damaging the monitor, I think that part is a myth. I've known lots of people who changed the size of the picture and never had problems, and at the same time, lots of people who left theirs alone and had their monitors die. I modified my SM124 in 1986 to fill almost the entire visible area on the screen, and it's been running great since then.
Remember that there are lethal voltages inside any computer monitor, and don't mess around inside unless you're sure you know what you're doing..! ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^