By removing the black bars on either side and changing the res of the screencap to 704 x 407 (instead of 704 x 576) it looks like this:
http://img95.imageshack.us/img95/4191/adscreencapvadimoqc0.jpg which seems ok. The aspect ratio is now 16:9 (standard widescreen ratio), so to fix it you'll need to re-encode the video to a 16:9 res E.G. 720 x 416, 704 x 407, 640 x 368, 608 x 351 etc. To retain the most quality 704 x 407 would be best (upsizing is pointless, and downsizing reduces quality). If the file is .avi, then VirtualDub / virtualdubmod can re-size it.
EDIT:
or
Originally posted by celtic_d (in a different thread):Easiest way would be to change the PAR using MPEG4Modifier. That way the player simply resizes and you don't waste time or quality re-encoding.