So I stumbled upon a solution by accident. When I was testing profiles for use on my zune 80 I was looking at the mencoder config file. I wanted to keep my files a little bigger resolution so I changed the size up to 640. The result cropped the sides but kept the file size at the specified 320x208. So after experimenting with the settings, here's how to remove black bars:
- Open folder: "C:\Program Files\Tyrell\MCEBuddy\mplayer
- Copy and paste "mencoder.conf" file to make a backup
- Open with notepad and replace these lines:
[PSP]
profile-desc="Playstation Portable"
vf=pullup,softskip,pp=fd,scale=320:-2,crop=320:240,hqdn3d,harddup
with this
[PSP]
profile-desc="PSP Cropped"
vf=pullup,softskip,pp=fd,scale=430:-2,crop=320:240,hqdn3d,harddup
4. Close out and restart MCEBuddy and select your modified profile "PSP Cropped"