First thing you need to understand is that LCDs have fixed position and size pixels. Your monitor has EXACTLY 1680 X 1050 pixels.
BUT, LCDs can take different resolutions as scale them to fit on the display. This does not improve the source or generate extra optical pixels if the source is larger than the display.
Thus, a 1680 X 1050 pixel LCD can pretend to have 1920 X 1200 (for example) by throwing away every 8th pixel, both horizontally and vertically. (it is usually not fast enough to blend the 8 pixels into 7 so it throws one away unless its a fairly high end/expensive display). It can also pretend to have 840 X 525 (as a unusual example) by duplicating every pixel h/v.
Also, the LCD can stretch horizontally a 1280 x 1024 image to fit 1680 X 1050 by repeating 5 of every 16 pixels.
Many widescreen monitors in their onscreen controls have the ability to disable widescreen stretching, thus they only scale to fit vertically and scale the horizontal the same factor and leave the rest on each line blank.
Thus, the best image you can get, is to set your game output to 1280 X 1024, and set the monitor to not stretch horizontally. This lets the GAME do the sizing since it is much better at it then the monitor is. Setting the output to 1600 X 1200 generates more pixels that JUST GET THROWN AWAY!! This is not like anti-aliasing where the graphic card blends the pixels in a ultra-high resolution and outputs the blended but still high resolution. (otherwise we would turn off anti-aliasing, set the output resolution to 2560 X 2048 and let the monitor do the anti-aliasing, LOL).