Scaler hq3x renders 320x240 and 320x200 with aspect true at 960x720 resolution. The scalar won't do anything more. Maybe that resolution is not supported by your graphics card/monitor so it does who knows what to show it in nearest supported resolution.
Possible solution would be to set fullresolution=1280x1024 and output=ddraw in config file.

Edit:
On my comp with default fullresolution=original and output=surface with hq3x scaler game is rendered at 960x600 resolution in window and 1024x768 resolution in fullscreen with black borders around. And with settings mentioned above it fills entire screen.

With the resolution set to 1280x1024 and the other setting set to ddraw, my games now fill up in the left\right direction. There is still a small border in the up\down direction but I like this better then the way I had it.

Thank you!

Set aspect=true if the borders are too big. If you don't want any borders (there should be small borders for correct aspect at 1280x1024 which is 5:4 instead of 4:3), set resolution to 1280x960 or some other 4:3 one and set your display or graphics drivers to fill the whole screen.