What do you mean, do you have low-resolution material that you want to enlarge to fit the screen? You cannot do it without loss of quality.
Use a sequence setting that matches your source material in terms of resolution and framerate.
It's like my video is really in the middle of the safe margin (I think that's what it's called). So my video is surrounded by black background and it looks weird. If I were to put text, then it's ok but the video is really in the middle of the stage...I hope that helps.
It's like my video is really in the middle of the safe margin (I think that's what it's called).
Yes. That is exactly what happens when the source material's frame-size does not match that of the Project/Sequence settings.
In CS4, you can alter the settings of the Sequence. I'd leave things exactly how they are in this Sequence, and then create a new one, with the exact settings, and dimensions of your source material. Drag your Video to the Timeline in that new Sequence and see if things don't look better. If you need to get the dimensions, go to the Project Panel, Rt-click on that Video and choose Properties.