using dazzle to record xbox 360 and I don't know why it's making these borders around the video. Using pinnacle studio 12 to capture using NTSC widescreen 16:9 MPG2 at 720x480 resolution. Here's a screen shot i took in vlc while playing a test video.
p.s. I can see those borders in pinnacle studio's preview window too before i even hit "start capture"
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The dazzle isn't making those borders. They are in the signal it's capturing. You don't see them on TV because TV's "overscan" the image -- they don't show you the entire picture, they hide the outer edges.
You should really lower the contrast/brightness to make the image inside the borders less awful.