Krusbert: Sorry for such a late reply! The AGS engine is indeed notoriously unfriendly to widescren monitors. If the "black bars" checkbox does nothing, I would suggest having it unchecked and instead find a setting in your graphics card control panel to retain the aspect ratio instead of stretching the viewport.
Eagleeye120: Is there a solution for this on a Mac? I bought Kathy Rain for a friend to use on her mac and the game stretches to fill the screen. It doesn't appear that there is a setup app within the file structure that includes the "Black Bars" checkbox.
Can you check if version 1.0.4 of the game works better on your Mac? We've recently released an update for the game and it's available in your account or via Galaxy :)