So I finally checked and tinkered with XMedia Recode and it was actually easy to use. The only thing that I don't like about it is how slow it converts the files, but it works. Personally, I use a different converter since it's faster. Anyway, there is a way to convert your DVD or other video files so that you can use the whole screen of the Droid without having the black bars. I'm going to list the step by step below on how to do this. I tried it with a 701 MB video file and the final output after converting it was 990.47 MB. You will need to download and install the XviD codec. Just google it, download the codec installer and install. Let me know if you guys have any questions about this.
How to Convert Without the Black Bars (Full Screen on Droid):
1. Rip your DVD to get te DVD files or find your video that you want to convert and open XMedia Recode
2. Load your DVD or other video file (choose the appropriate one on the top - DVD or Movie)
3. Go down to the "Format" tab and choose "Custom" for "Profile:" box
4. Choose "MP4" for the "Format:" box
5. On the right, put the dot on "Video and Audio" for the "Output stream type" box
6. Choose "XviD" for "Video Codec" box (you will need to install the XviD codec on your computer to use this, just google XviD codec)
7. Choose "AAC" for "Audio Track 1" box and same for "Audio Track 2" box (if you choose the other ones, the file size will get bigger)
8. Put a check on "Audio/Video synchronisation" box
9. Next, go back up and go to the "Crop/Preview" tab
10. Put "854" for "Width:" box and "480" for "Height:" box (854 x 480 is the Droid's screen resolution)
11. Go down to the "Destination:" box and choose where you want to save the file that will be converted
12. Click Encode on the very top of XMedia Recode to start converting (it will take quite some time to finish so be patient - around an hour)
13. After converting your video, just put it in Droid and enjoy! :icon_ banana: