5x7 and 8x10 are traditional photo sizes that are not the same aspect ratio as your original photo. Your measurements of the resulting printouts suggests that you are using a DSLR or something with 3:2 images (vs 4:3 in case of point-and-shoots).
If iPhoto were to print 5x7 or 8x10 of your images, it would have to 1) crop off the sides to fill up the narrower 5x7 or 8x10 frame, 2) stretch the photo taller so you'd have odd looking subjects, or 3) Fit the image within the 5x7 space in a sort of "letterbox" format. iPhoto uses this third option, which I agree is the best - I hate a printing service cropping off parts of my photo.
If you want to control exactly what gets included in the 5x7 or 8x10 space, select your photo, click Edit, and then click Crop to crop to a 5x7 or 8x10 frame (you have to choose it in the menu that appears) and then print the cropped image.
