This is the plugin code I see and you can alter to your needs
Code:
Content visible to verified customers only.
Your going to be bound here by the players limitations on quicktime. I am not real big into multimedia but if I remember quicktime does show a black border around small video's does it not by default?
Now video size is all dependent on your server setup. PHP by default has a 2mb upload limit but if you have the ability you can change your PHP settings to upload larger files. Your restricted by your server setup not Photopost in any way.