Jack, the settings that needed to be changed (for me, anyhow) were the project settings that come up right when you create a new project. Start a new project, and you will see the options for changing the resolution, type of video (DV or HDV, etc.), and so forth. Unfortunately, this doesn’t resolve the issue of why PPro CS3 won’t show the video running in the capture window when you’re capping, but you SHOULD find that the preview window is running the HD videos in proper perspective if you set it up correctly?
Also, what sort of camera are you using? These are PPro plug-ins available for some cameras, that act as a project-setting present specifically for those cameras.