I forgot... in addition to what I just said generally you should have the "stretch video to fill output frame" option checked which you'll see when you click on the make move wizard when you are selecting your render method. If you don't and you video is smaller than the frame size you select for rendering it will have empty space which you called black bars. You can fine tune the frame size, output qualtiy, etc., under the advanced render button. Click on the custom button that appears once you click on advanced render.

If the image looks severely stretched or squashed you somehow undone the fixed aspect ratio setting. Final output can look quite different when viewed on your computer monitor, played back from your video camera or played off a TV. Obviously you want it to look best playing under the final destination device you plan on playing it from the most so generally that's the rendering options you probably want to select. Some template are better suited for playing off your computer, others for playing from a VHS machince or off a CD you burned for playing from a DVD player.