Tell MaLa under the "display" tab to change your screen resolution to match the version of "Blue" you're running (hopefully 1024x768). It'll stretch a bit since 1024x768 is 4:3 versus 1280x1024 at 5:4.
Are you using an LCD screen perhaps? If you are, your video driver might not scale up when you select a different resolution, and just give you a 4-sided letterboxing instead. I hate that. Is that what's happening?