To remove unwanted letterboxing, try the following:
First, double check the original source file for letterboxing. Vimeo does not automatically remove hard-coded letterboxing from uploaded videos. If the source is letterboxed, you can fix by cropping the file in a video editing program.
If the video is embedded in a responsive web design, make sure the height and width are both adjusting to the page’s width. (To get your video's embed code, go to its video page and click the "Share" button. Then click the "+Show options" link that appears above the embed code field to reveal a preview of your embedded video with the Basic customization options)
If you still can’t get rid of those pesky black bars, give us a shout.