esung,
So what if your apps are windowed, they are distorted because your monitor has a 4:3 dimension.
To clarify this better, imagine you have a monitor that is 16:9. Use a 4:3 resolution and everything is distorted, it doesn't matter if the program is in a window, everything on the screen is distorted.
If your monitor is made with a 5:4 screen, then, yes, by all means use 1280x1024, but more than likely you have a standard 4:3 monitor. It makes no freaken sense to run at a resolution ratio different from your monitor, unless you enjoy looking at distorted images. I can't believe there are so many people are using 1280x1024...ahhhhhhh! :|
Now, to explain the distortion better....make a 200x200 square in paint. On a 4:3 resolution and 4:3 monitor you will see a perfect square. On a 5:4 resolution and 4:3 monitor, you will SEE a rectangle with the dimensions of 200x213. Almost 7% distortion! So why are you still running at 1280x1024, ack!