I encounter this error when viewing a replay from the garage screen. I am running at my bezel enhanced triple screen (5228x1050), on an ATI HD5770 with the April 2012 Driver package (Win 7 x64, fully updated). When viewing replays from the Garage, it seems that it is squeezing the triple screen width onto only the center screen. Because the side monitors do not display in this mode (unlike the "Quick Replay" option when you press R while driving). The end result is the replay playback occupying only the center third of the screen, which of course looks thin, as if the video did not have the proper resolution. I have attached a reduced sized image of the screenshot - this is as it appears in full screen mode. I should note that the thumbnail image when in the Garage UI also appears this way. Oddly enough, the quick replay looks fine, occupying all three screens. This mode has its own issues though, since the center screen is letter-boxed (black bars along the top/bottom), but the side screens are not. Additionally, the text replay control instructions on the bottom of the screen appear oversized and are displayed 3 times, each at a different offset.
I have the same problem, GTX580 3GB, 5040x1050, NVidia 301.24 drivers. For me, it's not just in the garage. The full-screen replay only uses the center screen, and it's squished. In v.69, the replay only used the center screen, but it wasn't squished.
Have you tried hitting the replay key 'R' ingame while in single player mode, Im quite sure that was working ok last time I played.