Hi,
I don't know what or why things gets like this, but my solution was to tweak the settings to get it perfect.
My video was 720x402 but then got black bars on the sides just like you did.
So i added 20 pix to the height in the page that have the video like this:
{flv}myvideo|720|422{/flv}
Now the image and video is perfectly fitted 8)
I hope this helped.
Cheers