Hi Jabar.. I have (somewhere) a toshiba 4070cds with 192 megs ram, I recall it does 640x480 and 800x600 at a lower bit rate, and better if you use an external monitor rather than the lcd. Yours may be similar, I think the cdt had a higher res so perhaps yours is 800 and 1024 thus the black boarder, it's at 800.
Anyway try a monitor if you have one or lower the bit rate on the higher res or perhaps use vesa rather than xorg, not sure how you make that selection with vector anymore but someone will likely help.
I used puppy linux as it is designed to run on as little as 128 megs and runs in ram so my 4 gig hd could be used as a save file and swap file. even with puppy I had to tweak the vid setting to work at the higher res.. damnsmall was also used on this but one or the other would not allow use of my pcmcia backpak cd burner.. eventually hotmail would no longer work on the resolution so I upgraded to vector on a desktop with more ram, and better graphics..