Distorted video playback

I am trying to set up an experiment that includes a video presentation but when Medialab plays the AVI file it appears distorted (horizontally stretched) and in the top left corner of the screen. I can't seem to perform any adjustments using the numbers in the parameters. Is there a way that I can have the video centered on the screen and in the proper aspect ratio?
Incidentally, it plays fine in Windows Media Player.

Thank you in advance for your help.

Edit: I have found a workaround. After converting the video to .wmv format it plays fine (no distortion) and parameters adjust the screen positioning properly.

Just curious--what version of Windows and version of MediaLab are you using?

I'm using Medialab 2006, Windows XP Home, and Windows Media Player 11.

Odd, haven't heard of that before, good to know that converting to the wmv format helped.