The problem is that you are using the DVI previewer. The design of the DVI format does not allow to specify the paper size as part of the document, and hence paper size is something that needs to be set prior to calling the viewer by the user whenever not using the default size (which is letter paper or a4 paper for most distributions depending on your locale).
The beamer format by default outputs slides with frame size 128mm by 96mm, which is somewhat smaller than either of the us letter size or the ISO A4 size. This means that if you build your beamer document using latex outputting to a .dvi file, and view it using a DVI previewer like YAP, your previewer will be trying to virtually "print" the document onto A4 paper (let's say) and displaying that, which means you see all the margins that you saw.
The beamer user guide suggests that you use one of the two workflows:
- Build using
latex to .dvi output and processing it with dvips (Note, not dvipdf.) to get PostScript output, which you can then convert to PDF format.
- Build using
pdflatex to directly get PDF output.
If you use pdflatex and view your slides using a PDF previewer, since the PDF format does allow specifying paper size in the document, the slides will display correctly.