video with resolution higher then screen is not displayed correctly without scale.
VLC 1.1.4; Windows 7 x64.
Playing any .mkv 1920x(1080p) video on my laptop with a 1366x768 screen works if the "Scale" option is enabled. Disabling it will cause the image to actually get smaller. Setting zoom to 2:1 will further decrease the size of the video. It looks the algorithm doesn't handle the degenerated case where the video is larger than the screen, where probably only the center pixels shall be displayed.