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Does this version have working widscreen built in to the game?

With the steam version the game often crashed (like almost every time) during cutscenes, does this version fix that?
It has not, you still have to implement widescreen support yourself, but that is not too hard.

I tested the game on Linux per Wine and there the cutscenes and everything else worked fine. I'm pretty sure if you had any problems, it was because of your system not because of the Steam version.
As I said in this thread so nobody had to ask:

"If any of you experience issues with running in widescreen, try Flawless Widescreen - worked brilliantly with the steam version and was nice and stable too.

You might have to turn that grass off though!

Hope that helps someone at least."
I actually had a lot of issues with my Steam Version and never got the Game running properly, many others did find fixes but only due to other users.

For widescreen and Multi-Screen you can look to
WSGF = Wide·Screen Gaming Forum

WSGF users have created several options including Multigame Tools. My recommended Order of Preference is

Flawless Widescreen v1·0·15
Widescreen Fixer v3.4 r716
Universal Widescreen (UniWS) Patcher v1·03

Different Tools work better for different Setups and I have 7680×1440 (3 of 2560×1440) Eyefinity.
Though I'm happy to get this Game running on a single Screen and WSGF Forums are great help sources

Flawless Widescreen is my goto tool and even brand new games require attention, it only has Games on it if issues occur latest
The Vanishing of Ethan Carter - Typical issues associated with Unreal Engine
The Evil Within - A number of issues
Middle Earth: Shadow of Mordor - Issues with letterboxing, Menu FOV and HUD
Alien Isolation - HUD Problems on Nvidia Hardware

More Relevant

Star Wars - Knights of the Old Republic was designed for specific resolutions eg. 800x600 - 1600x1200, when attempting to modify it for higher resolutions or even widescreen resolutions many problems are introduced.

This fix injects a custom C++ DLL that dynamically creates new GUI files based on the active display resolution and new TGA background art, additionally it fixes the cutscene black bars and missing text on some resolutions, it's not perfect but it's a start.

NOTE: You must start KOTOR and exit atleast once before this fix will properly be active, this is because custom files generated need to be detected by KOTOR before it starts, additionally graphics backgrounds and GUI files will not be generated unless you change the resolution

Flawless Widescreen
Widescreen Fixer
Star Wars: Knights of the Old Republic | WSGF