It really depends on your monitor and your video card. I have a Viewsonic widescreen LCD display and it automatically scales older 4:3 content just fine without stretching. (It puts the black pillar bars on the sides.)
Yeah that didn't work for me even though I have a widescreen monitor under the same brand. As for my video card, I have a GTX 260 core 216 so I doubt it has anything to do with its compatibility.
That's odd. I'm using the same graphics card. (Well, I don't know about the 216 bit, but its definitely a GTX 260..)
Are you certain you've checked your settings? For example, on my monitor to hit the aspect ratio control I have to bring up the menu, select "Manual Image Adjust", and select the "Aspect Ratio" button. I also know the Nvidia control panel has a "monitor scaling" option that covers widescreen vs. 4:3 as well.