When you run the test, does that image get stretched as well, or does it scale in size as expected when changing the resolution?
How much does it go past the screen? If only a bit, you may just need to adjust your monitor for that resolution. This shouldn't be a problem at whatever resolution your desktop is set to.
Click Start | Run, type in 'dxdiag' and hit Enter. If it reports any problems, you could try reinstalling DirectX.