First, I would burn an RW disc to see if it is just a preview issue.
Seocnd, if possible, please post screenshots of:
1. A template menu in the menu viewer that shows the side stripes.
2. A custom menu of yours from Photoshop in the menu viewer that shows the side stripes.
3. Any menu that comes back from Photoshop looking “letterboxed” in the menu viewer.
4. The transition video where the menu fills the screen.
Make sure all of the Menu Viewer controls are visible in the screenshots.
Thanks,
-Jeff
The Focal Easy Guide to Adobe Encore DVD 2.0