Yes the 4:3 is stretched, but the image looks normal, whereas the 1080p everything looks long?
9
EDIT: It's difficult to get a good picture... Looks more normal when I take the photo. This is from my laptop (1920x1080). Spot the difference now?
Default - Like the VHD box in 1080p.
Custom aspect ratio - Similarly to the VHD box with scart, but you can see the sides here. This is also how it looks on my laptop's screen.