@farecoal: I had to really play around with this issue when I just reinstalled the game. I'm not sure what changed but in the latest version of Catalyst Converter the options to enable GPU scaling and select "maintain aspect ratio" to make the game run in a 4:3 ratio (no stretching) are unavailable unless you set your desktop to display at some resolution other than your monitor's native res. Which I'm sure I was able to do on this monitor, running at its native res, before I upgraded to Win7 and installed the newest CCC and gfx card drivers.
However - after a combination of searching through the forums here, following the various leads I found, and tinkering on my end, I have been able to get the game to run at a res of 1400x1050 in a 4:3 aspect ratio, which takes advantage of the highest res possible on this monitor without stretching the game into a WS format (which others may not mind, but I find it very offputting).
First step was to install the Res Fix mod I linked to in my initial reply (
http://www.subsim.com/radioroom/down...o=file&id=1092) and follow the directions for that to make the game run at 1400x1050 by editing the d3d9.cfg file that is used with that mod.
The second step involved the fact that I have two display devices hooked up to the gfx card in my rig - one is my monitor here on the desk, the other is a TV a few feet away. So I have two desktop displays available. I had already set them to "duplicate" rather than "extended" because on the "extended" setting SH3 Commander will not display properly (by default it opens in the center of the available desktop "space" and cannot be moved - so in "extended" mode half of it would be on the monitor, and half on the TV screen, which I don't use except to watch movies).
Now since my monitor runs at 1680x1050, I have the display set to that res in Windows Control Panel (and CCC). When the two displays are configured as duplicates of each other, the 1680x1050 res applies to the TV as well - but that's not its native res. Consequently when I go into CCC and right-click on the TV's icon in Desktops & Displays to configure that display, all the options for scaling are available (even tho' they are greyed out if I do the same thing to configure the monitor display instead). So I configured the TV's display to Enable GPU Scaling and Use Centered Timings (which may have the same basic effect as Maintain Aspect Ratio, but to me it looks better for some reason - but either one worked as far as keeping the 4:3 aspect ratio for the game).
Now the really tricky part - when I would run the game and look at it on the monitor, it would still be stretched out to WS because the monitor is still running at its native res and the display configuration I set up for scaling didn't apply to it, only the TV. BUT - in one of the threads here I found a link to a program called Display Changer, which can be downloaded and installed as freeware for private use and which allows you to set up a command line in a shortcut to any application using various commands, one of which will force Windows to change your monitor resolution
only when that app is running. Done properly, it changes the res before launching the app, and changes it back to whatever is set in Control Panel after the app closes.
So now when I launch SH3.exe, the resolution of my desktop is reset to 1400x1050 by the Display Changer command line - and voilą, since the monitor is no longer at its native res, the scaling options that I set up for the TV as a duplicate desktop now apply to it as well, and the game runs perfectly at 1400x1050 in a 4:3 aspect ratio with no stretching. When I exit the game, the desktop resolution is reset to 1680x1050, and everything goes back to just the way it looked before I launched the game.
And I've also found that this works even when I launch the game from Commander instead of just clicking on the shortcut to the SH3.exe file to open the game directly.
Now, I don't know how this will play out if you've only got one display - but it's something you might try. What I'm wondering is if you changed your resolution to something less than 1680x1050, it would open up the scaling options for your display in CCC. Then select Enable GPU Scaling and either Maintain Aspect Ratio or Used Centered Timings. Click OK to save the changes and get out of CCC. Then go back into Display Properties in Windows and change your desktop res back to 1680x1050. It's possible that the options you selected when you were at the lower res, will "stick" and go into effect again any time your res is reset to something other than 1680x1050. If so, you can use Display Changer to force the res change only when SH3 is running (along with the Res Fix as noted above) and see what happens.
Display Changer can be found here:
http://www.12noon.com/index.htm
Anyway - if you've already figured something out on your own, or opted for one of the WS mods and got it working for you, then disregard all of that.

I just thought I would throw it out there since I ran into res issues of my own trying to get my reinstallation running the way I wanted it to and finally figured out a way to run the game in my preferred style without having to tinker with a bunch of stuff before every session.