If this have been covered before, I'm sorry but I feel that this is an important thing.
You may have noticed that all your old games made for non-widescreen monitors look stretched out and horrible on a computer with a widescreen.
Luckily it is easy to fix:
If you have NVIDIA, just go the NVIDIA control panel, select screen and select scaling. There you can choose between running the games in their native resolution (too small on my monitor), resized, but with correct aspect ratio, (what I use), and resized to fit the entire screen ( which looks horrible.)
For NVIDIA and ATI graphics cards there is an option in the driver settings. For Intel on board graphics cards and the like, I don't know but hopefully they have a similar feature.
Also, on by nephew's windows seven old games ran non-stretched as default as opposed to Vista and XP where the default is stretched.
Of course the old games looked a little bit better on the old CRT monitors they were made for, but I think the newer LCD monitors scale the graphics better than the older ones did.
I remember how blurry HOMM 2 looked on my first LCD monitor. Now it looks almost like it did when the game was new.
In short: If you have XP or Vista you should look through your graphics card options. (If you can't change it through them, maybe someone have made a program for your needs?) If you have Windows Seven, you should be fine.

I agree, non-widescreen games or videos stretched to fill a widescreen monitor look terrible!
They do: "Scaling" - "Maintain Aspect Ratio"
I think the default scaling setting depends on your graphics driver, not on the operating system.

The monitor and the type of connection used are also a factor. For example, some monitors do built-in scaling and any monitor connected via a standard VGA cable will not do any scaling through the video driver (it must be connected via a DVI or HDMI cable).

"I think the default scaling setting depends on your graphics driver, not on the operating system."
Probably both. Though I don't know when one of them will override the other. But my nephew did upgrade his pc that had Vista to Windows Seven. He said that before some games were stretched out, now they are not. It seems most likely that it has something to do with the operating system.
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"The monitor and the type of connection used are also a factor." I didn't thnk of that.
I wonder how it will work if I buy a new LCD monitor for my laptop which only has VGA output :-( Will it be able to show a 640X480 game as say 1280X960 if the scaling is done by the videocard, or will it be shown as a tiny 640X480 stamp in the middle of the screen?

let me answer that. Some time ago, I bought a 22" VGA LCD (stupid me). The screen is nice, but I really tried many tricks to get my system to maintain aspect ratio. Unfortunately, I still didn't find anything that actually works :( So as far as I know, fixed aspect ratio is not possible on VGA :(I still don't get why)
At one point I even found an application, that was able to scale resolution correctly for VGA monitors too, but the person who wrote the guide himself recommended not to use it (very frequent system crashes). I can't find the link now, I will post it here if I manage to find it.

Ah, I remember the first days I used my 24' iMac, I was so sad to see all my good old games all stretched, so ugly... at least on the Windows side (I've not encountered this problem with OSX games).
And then I've read about the ATI driver and Catalyst, and the "respect ratio" option. I was so happy that day!
But there's another problem with big widescreen monitors and recent games. For example on my 24' iMac, the native resolution is 1920x1200. With recent games, I can experience framerate falls with this resolution. And if I choose a smallest resolution, well... it's all blurry... very ugly...

I have a 22" 16:10 LCD (1680X1050 resolution) temporarily connected to my notebook via a VGA cable. The monitor itself automagically stretches anything displayed on it to fill the full resolution and I cannot set any aspect ratio settings in the driver or on the monitor itself that will make it not do that. For example, Sacred Gold runs at a fixed 1024X768 resolution, but with the monitor on my laptop, it gets stretched out to 1680X1050 and there is nothing I can do to change it. When I have the same monitor connected via a DVI cable, the fixed aspect ratio settings of my driver suddenly become available and I can force the game to play at its normal res, filling the screen vertically with black bars on either side of the displayed image, or, if I wanted to, filling a 1024X768 square in the center of the screen.

I simply run my games in a window. I hated to do that or even think it until a few months ago when I finally gave it a go on XP, then on Win7 half my games are running in windows because it's so easy to multi-task nowadays with a quad-core CPU.

http://www.widescreengamingforum.com/wiki/Essential_Games_List