The reason your Instagram videos might be coming out stretched and slightly distorted is due to two things:
1. A bug in the latest update
2. The app compensating for "shaking" or jittery movement while filming.
Why Instagram is stretching your video
While I don't know for sure, I'm guessing this bug first popped up with the iOS7 Instagram update, because I hadn't heard of it before then.
Basically, to accommodate the new larger display style, videos that are uploaded from your library into Instagram are stretched to the correct size.
Of course this doesn't look great, and is an issue that most Instagrammers hope will be addressed soon.
Other reasons Instagram might be stretching your video
As mentioned above, there could be a couple of other reasons why your Instagram videos are coming out slightly stretched out:
- Instagram doesn't deal too well with movement, shaking etc.. Try comparing it to Vine for example, and you'll see what I mean.
- Instagram videos are forced to fit into a square frame. If you have videos recorded with different dimensions then that can be an issue.