My monitor's native res is 2560x1600. I use the GUI Widescreen MOD for LSH3 and set the resolution in the V15 "main.cfg" file for 2048x1536.
Every game screen is big, beautiful, crisp and sharp; I don't have any "jaggies" nor any frame-rate issues. Those seem to be resolved best by the settings in the graphics card controller; mine is NVIDIA "Manage 3D Settings" and I use the recommended values that are in a thread on the SH4 forum. IIRC they are: Anisotropic filtering = 16X, Antialiasing Override/4X/4X Supersample; Texture Filtering - Aniso = off, Neg bias = Clamp, Quality = High, Tri-linear = On. I also made sure that the Scaling Mode is set to Aspect Ratio and Perf. Scaling is set on GPU.
Hope this helps...sink 'em all!