The same goes with other DVD-players.
That's because the top/bottom black IS part of the image, poor widescreen encoding, same as most tv channels do with wide movies when they show em, the black bars are part of the encoded image.
You'll need a player to zoom in on the image all through playing it, I don't know of any that do so, though I never really played with zoom player, too buggy when I tried it.
An alternative to playing dvd's on your pc could be with a decent regular dvd player, a capture card, and a capture software/player that allows zoom. I've never been able to see the point in playing dvd's on a pc personnaly.