I'm aware of the stretching, and the new gallery will account for this so the wide images won't be a problem.
In the new gallery I am not going to resize to 1024x768. You can upload however big resolution you want as long as it meets the filesize requirement. When I thumbnail the images, there will be 2 size thumbnails. 1 tiny one (portal, gallery, etc) and one medium one (image detail, somewhere around 900-ish-px wide), and then a link to the full size picture.
The only down side to this is the people who run 800x600 have to scroll as Carol pointed out. Most new computers and monitors/LCDs are set up to run 1024x768 .. I guess it's time to see what would best serve the majority:
vote in this poll.