Hello,
I am having the same problem. When I produce the output file at the same resolution as the input file (1280 * 1024), the actual screen area is still small (and distorted), but a large black border has been added around the outside.
I have attached two screen shots taken with AVS Media Player, one of the input file (recorded in Camtasia studio) and one of the output file produced by AVS Video Editor.
Can you help?