It is called picture boxing. It should only be happening on SD channels. If you think (or know) you are on an HD channel and this is happening, something is screwy. Need to look thru your setting and make sure you have the output set correctly.

On an SD channel, you simply use the 'zoom' feature from the format selection and it will fill the screen properly.
On the Hopper, it is a multi button press task = Press 'Options' on the remote, then select 'Display Format'.


Side note:
Everyone has been saying how great the Hopper3 is. And it is a nice receiver with good performance and features.
But the user interface and functionality has GOT to be the biggest POS every made. I have installed a few now and it is very confusing to use.
One customer gave up trying to figure out how to delete a season pass they setup to record. I looked at it and even took me like 10 minutes to figure the crap out. No excuse for that horrible of interaction. Many things you want to do (which are easy to figure out on other platforms) are a nightmare to work on the Hopper3. The interface designer just needs to be shot dead, plain & simple.