The problem may be that VHS isn't HD. These devices typically don't do live scaling of input signals.
You may have to capture as DV.
Matrox gives the option to scale. In fact it has to be on to get signal to the Capture window. It letterboxes/sidebars.... basically it puts the 4:3 in the middle of the 16:9.
That said, I tried changing it to DV and while it changed the capture size to 4:3, I got the same results. The Capture interface looked like it was good to go but upon hitting record... the same as described above.
I'D try posting to the Matrox board over on Creative Cow. It's specfic to that product. Unless this works outside of Premiere just fine. Even then, I'd assumedeeper knowledge on it, and company people checking the posts.
There is also a forum provided by Matrox specific to their products. They might know something.