I think I figured it out! I was certainly confused at first, but then the same thing happened to me in G-Force on my new work computer today...
I think you have two separate issues.
First, when you are playing Video, check the Aspect Ratio settings (right click on the Video window in Playing Now and choose
Aspect Ratios) and you'll likely discover you have it set to something odd. Set it to
Source Aspect Ratio for most videos. Sometimes if you try to play a video that isn't properly encoded (or a file type that doesn't store aspect ratio data) you'll need to set this manually to something different. The setting persists though so remember to check there if your video playback is weird if you've messed with it.
Secondly, I think G-Force is a separate issue. If the "letterbox" effect only occurs when you have G-Force full screen (or big anyway), then you probably have it set to have a frame height limit. Open the G-Force toolbar (on the Start Menu) and open the
Visualization Preferences. Set the Frame Height and Frame Width limits to No Limit (or at least make sure it exceeds your selected resolution in
Full Screen Mode on the right).