I don't know if you can do this in Encore but you can in Premiere, when you drag the video clip that you want to resize, because thats what you want to do, as you say it covers the buttons and you don't want that. Click on the video clip and see if it gives you drag handles around the outside, they may appear as little black boxes at every corner. If they do appear click on the one at the top right and drag it into the centre to make the clip physically smaller. You could also try holding down either the SHIFT key or CTRL key to keep the size in proportion. If drag handles don't appear then right mouse click on the clip and see if a menu appears and it might have a resize function available to you, click on it to select it and a dialog box should appear where you may be asked to type in a width and height.

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