Sorry for the reply delayed due to our National Holiday!
Since the converted file can be only the same proportion as the original file. The proportion of your original swf file is 1024/768 = 1.33, and for the converted file you expected 720/576=1.25. According to the propertion of your original format, the width will be 720/1.33 = 541, but the expected width of your file is 576. then the rest part will use black border instead.
To solve this problem, you can use Trim and Crop function to make the original file as 960*768 first, and then convert the file to 720/576, then you will not get the black border.
Hope that helps and have a nice day.