Most of these old games pre-date widescreen monitors, so attempts to run them in widescreen resolutions (if even an option) result in squashed graphics.
I remember the ATI control panel having an option to maintain aspect ratio, which would force the black bars on the sides of the screen, but the picture looked proper at least. I'm using the latest 10.2 catalyst now, and I can't find that option. Haven't been able to since the 9.x versions somewhere.
Did they remove this feature, or am I just not looking in the right spot?

It is still there. Go to the display tab (I think) and right-click your monitor and go to its settings. I would go into more detail, but I am on my lappy right now.
But one thing worth noting: it will almost definitely be greyed out when you find it. What you need to do is temporarily lower your resolution, change the setting, then raise your res again. It will work, you just can't change the setting when you are at your monitor's native resolution.

I am using the ATI Catalyst Control Center Version 2009.023.2228.40314
Under Digital Panel (DVI) Atttributes Section
-- Image Scaling
-- Maintain Aspect Ratio

Yeah, it's hidden now, which is lame.
Desktop & Displays > right click monitor on bottom > Configure > Enable GPU scaling > Maintain aspect ratio
You shouldn't need to lower your resolution.
While we're here I recommend going to Avivo Color and turning Saturation up to about 135. Makes things more vibrant. :)

Ah, yes, there it is. I didn't think of right-clicking the monitor in the bottom of that window, only the one in the middle.
Gundato is right, you can enable the scaling, but the method is greyed out and forced to "scale image to full panel size". Only when I change resolution to a lower value can I select the "maintain aspect ratio" option. But if I change res back to 1920x1200 (monitor max), the option greys out again and resets to full panel.
So before I play an old game I have to lower res, select option, play game, then set res back? I hope not.
Update: Ah, never mind, it does seem to retain the scaling setting. Just fired up Balls of Steel and the 4:3 aspect ratio is intact!
Thanks for the help, folks!

Ooh I misread.
Good stuff. Glad you're sorted.