Hi
The aspect ratio of your raw clip is 1 : 1.5 (720/480) whilst VPs aspect ratio is 1 : 1.77 for the full screen. This is for normal digital camera output of 1920 x 1080 or 1280 x 720 etc i.e. 16:9
This means that in order to "fit" your 720 x 480 pixel images to the screen area AND keep the image ratio of 1:1.5 correct it has to leave black bars on each side once the height has been made to fit. (To have the aspect ratio to fit across the screen your images would have to be 852 pixels wide, which, of course is not the case)
The VP image you have when you add your 720 x 480 clips will always be 1 : 1.77 and have the difference filled in on each side.
Any manipulation you do like cropping will affect your raw image and not VP screen size, so the black bars will remain (cropping them in fact will just make them larger as all you are doing is narrowing your already narrow image.)
The only way around this for the whole of your film (but with a down side) is to ...
Go into storyboard mode Left click your first clip to select it.
Click the Effects button and select the crop option. Don't crop anything for the moment.
On the left you will see your frame (without the borders) click the 16:9 option.
Your image will be cropped to this ration (1 : 1.77)
Now, the downside, you will have lost some of your image either at the top or bottom, so grab the red frame and move it up or down to include as much of the clip as you feel is important.
The clip will now play in the complete VP window although you will have lost some of it at top or bottom or both. There will be no distortion to the remainder.
Treat the remainder of the clips in the same way.
If you want the WHOLE frame you will have to put up with the black bands on either side.
Nat