So I'm playing the DeathSpank demo. I've changed the screen size in the options to fit perfectly my 1280x1024 monitor, but it still seems wrong. It seems the game's in 4:3 and is being stretched.  
Anyone else noticing this? Or have I gone maaaaAaD?

1280x1024 is a fairly common resolution. I played it and didn't notice anything looking terribly stretched (and I usually do), but I'd have to look again.
 
I'm fairly sure the screen size options should actually be labeled "HUD border." I don't think it has anything to do with rendering the game world.

What console? The Xbox only has 4:3 and 16:9 options (at least with HDMI, I think other options may be available with VGA), not sure about PS3. 

What console? 360. 
And yeah, it's not a crazy resolution at all. The 360 supports it, end of. 
It simply seems to be that it's 4:3 being stretched to 16:9. 
 
Just to be clear, I have NO problems with other games - my monitor is fully supported, and yeah my xbox is configured correctly. 
 
Hmmmmmmmm...

I've certainly seen games display a 16:9 signal on my 5:4 (that is, after all, the ratio of 1280x1024) monitor - curse you Oblivion.
 
This didn't seem to be one of them.
 
But I forgot to go back and look.

Hummenah, hummenah, hummenah. 
 
 I'd've played Oblivion in all sorts of messed up squished aspect ratios.  
Ah well - after reading several reviews, I think I'll give it a miss. There are so many seemingly good, well received arcade games this summer; I simply can't afford to get a mediocre one aswell. 
 I'm wondering whether trial games get the same updates as their full version counter-parts? And whether this problem has been resolved by now. Who knows. 
 
Thanks anyway guys!