Interessting..
I was thinking about the cause for the size mismatched.. and it dawned on me.. the resolution! 640x288 is much bigger than most games!! (don't bother comparing the horizontal resolution, it's the vertical resolution that counts!)
So, if 288 lines is full screen, than 240 lines (what most horizontal games seem to be) is not! And why vertical games look bigger than the screen (since they're more than 288 lines vertical).
Further more, if you have a vertical refresh set perfectly for 288, it might roll at 240!
Yet, if you use 640x480.. the monitor can't really do 480.. it fakes it with interlace.. so the true resolution there is 640x240 (240 x 2 passes to make 480!). Hence we're back to the magic number of 240.. and in this case, the menu might look bad interlaced, but at least everything will play better (except for vertical games, and any game that is >240 lines.. while <240 lines will just show black borders)
I'll experiment with this tomorrow.. but it all makes sense on paper.