This is a common one. Came up a few times on the original testing thread. Perhaps I should add an FAQ.
You need to configure the video plugin you are using (as selected from the runcommand menu that pops up just before the ROM loads).
For example:
I usually use mupen64plus-video-n64.so (gles2n64) for the likes of MarioKart. I prefer full screen stretch rather than 4:3, but each to his own. My TV is 1080p so…
In gles2n64.conf make the following changes:
#Window Settings:
window width=1920
window height=1080
#VI Settings:
video stretch=1
The config file should be located at /opt/retropie/configs/n64/
If it isn’t there you may need to run the emulator with that video plugin selected first, so it is created on first run.