That's the standard way the videos are shown up in the time line. To change their aspect ratio, go to Project Properties and set the output to wanted aspect ratio (16:9 recommended to be compatible with all devices). Alternatively, right click the video and look through the available options. For more information go to Help and use the built-in Search function to look for aspect ratio. There is also an ongoing discussion on the Roxio forums. Access the page and read the answers given by users.