Final Cut Pro 7 Slow Render, Frame size changing

Why are you editing widescreen footage in a 4x3 frame? Why do you want two perfect black bars instead of a widescreen image? confused!

Does the clip also get stretched up?

Yes, it sounds to me like the pixel aspect for some of your clips is wrong. If you will double click a clip with black bars and go to your viewer window, click on Motion, click the triangle by distort, take note of the number by aspect ratio. Now, do the same for a clip without black bars. The number is probably different.

If you would take screen grabs of the canvas window and viewer window (viewer window showing the aspect ratio number) I may be able to further assist you. I apologize I'm not super familiar with pixel aspect off the top of my head, as I'm usually working with the same footage all the way through a project.

Okay, that helps. Match the settings for "scale" and "aspect ratio." and see if that works. If not, the down and dirty way to fix it is to put your play head over a clip in the sequence, highlight the clip, and in your canvas window grab a corner, and while holding shift, drag the corner out to fill your screen and just eyeball the correct aspect.

Where did you get that footage? 854x480 is a display size. It sounds like your footage was ORIGINALLY anamorphic DV. Which is actually 720x480. You would need to tell FCP that the footage is anamorphic, either on ingest, or by checking the anamorphic column in the browser-- EXCEPT that somehow the clips are baked in to a non standard size-- like someone exported them at the anamorphic display size. You would do this for example if you were making a file for projection or computer use, where the anamorphic flag would not necessarily be recognized. But you normally would not do this if you were still working with the footage in an editing program.

You might also note that the top clip above is set to less than 100% scale.

What happens if you select all in your sequence and Edit>remove attributes>basic motion and distort?

Quite a mess you've built for yourself, or someone handed you.

Another thing that I'm noticing with the screen grabs you attached, it looks like your screen may be setup with the wrong aspect ratio under your OS system settings. The pictures look as though your screen is squeezed. This will certainly make it more difficult to see problems, and you may find that your output looks different on other screens setup with the correct aspect.