You need to enable TV-Overscan.
The behavior you are witnessing is intended. Since the default expected use
for the TV-out is as an extension to the desktop and because of the design
of most televisions, which is to obscure the outer edges of the display, the
drivers output the display in a slightly scaled format... probably about
90-95%. In this way, none of the outputed image is obscured. While this is
desirable for application type work on the TV, it is not ideal (or not what
we're used to) for watching movies. With that in mind, ATI has included the
ability to enable or disable TV-Overscan (which does not scale the image
output at all) via the Control Panel GUI since Cat 3.9 I believe ( don't
remember exactly when ).
Hope that helps.