hellomello123: I have now entered the resolution as 1280 x 720 but now when I launch Baldur's gate the game only appears in the top left hand corner. Blackness surrounds the rest of my monitor. I am, however, still able to move the Baldur's gate cursor around the blackness. Thanks for being patient with me.
I have a 1366x768 laptop myself, so I checked there. Baldur's Gate was unfortunately uninstalled, but Icewind Dale was still around, and they use the same .exe for widescreen I believe. Fired up the game, and loaded a save, and sure enough, it was in full widescreen. So it looked like 1366x768 should work.
Not much help perhaps, but if it worked for me, it should work for you too.
It could perhaps be that something got messed up when you tried the faulty install of the widescreen mod (re: your screenshot), so maybe a clean install would do the trick? I know I've seen that error before, and I think it was when I made the error of installing Tutu with a BG1 install that was tampered with (it has to be completely clean, so no mods and such shenanigans).
So, if you have done the same, Tutu with a BG1 install with some mods (fixpack for example), then you probably need to start over. At least that was my experience.