Screen resolution! My monitor thinks it is 5:4 despite being 16:9?

[Blacklightps2]

Hello!
I am planning to start recording video game gameplay. I have a 16:9 monitor (http://www.currys.co.uk/gbuk/tv-dvd-blu-ray/televisions/small-screen-tvs-up-to-32/logik-l22fed13-22-led-tv-with-built-in-dvd-player-20374552-pdt.html) however, here is where it gets a little bit wierd...
In games, such as GW2, i have a choice of resolutions: 1920x1080, 1280x1080, 1440x900 which fit my screen correctly (No bars or stretching). However, as my PC is not that powerful i am unable to record in a high resolution such as 1920x1080. That leaves me with the lower resolution: 1280x1080. However, this resolution is a 5:4 ratio but it fits my screen perfectly despite my screen being 16:9? When attempting to record, the obvious black bars appear at the side due to it being a 5:4 ratio. However, on screen it fits as perfectly as the 1920x1080 resolution. Any ideas?

 

[ss202sl]

auto scaling on the monitor--- stretching the image to fit

 

[Blacklightps2]

auto scaling on the monitor--- stretching the image to fit

But when i try to use a resolution such as 1280x720, it does not fit the screen at all with it being only on the right hand side and a large black bar on the left. Is there something wrong with the autoscaling then?