Pdflatex is using the wrong margins. How can I fix it?

This problem is sometimes caused by the PDF page height and width not being specified correctly. Put the following right after your begin{document} command:

special{papersize=8.5in,11in}
setlength{pdfpageheight}{paperheight}
setlength{pdfpagewidth}{paperwidth}
% You may need to change the horizontal offset to do what you
% want.  Setting hoffset to a negative value moves all printed
% material to the left on all pages; setting it to a positive value
% moves all printed material to the right on all pages; not setting
% it keeps all printed material in it's default position.  voffset
% is the vertical offset: use negative value for up; don't set if
% you want to use default position; use positive for down.
% hoffset = -0.2truein
% voffset = -0.2truein

% Thomas Esser, 2004. public domain.
pdfoutput=1
pdfpagewidth=8.5in
pdfpageheight=11in
%pdfpagewidth=210 true mm
%pdfpageheight=297 true mm
pdfpkresolution=600
endinput

There is an easier approach for TeTex users: the texconfig-sys program can be used to configure default paper size and other settings.