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Recently I saw a documentary in youtube 'Home'. It points out that in America, for feeding cattle, a lot of wheat and other food products are used and these animals are then killed for food. What are the side effects of this? How does this affect nature? If it does cause any serious side effects, does vegetarianism help in protecting our home earth?

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Yes, being a vegetarian is more environmentally-friendly than otherwise

This question has been asked and answered on Skeptics Stack Exchange, based on a claim by PETA to that point. Full details are in this answer. To summarise the summary:

  • Production of meat is a major source of anthropogenic greenhouse gases. A vegetarian diet therefore leads to less emissions
  • 80% of deforestation is to grow more crops for feeding livestock, so a wide adoption of vegetarian diets would reduce deforestation significantly
  • There are other factors as well, such as use of water sources.

So, yes, vegetarianism does help to protect the environment.

  • I'd better say that an industry-limited (or -free) will help far more than this or that diet. However, that does not answer to the original question. – Mario Vernari Aug 30 '14 at 15:25

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