Truth about Edge Distortion
(don't have the WSGF OpenSearch plugin installed, Pyros? ;) :nudgenudge )
To the OP: the cause of distortion has to do with how engines render the gameworld. In just about every engine I've seen, the virtual 'camera' behaves like a transparent sphere, and the images projected by the engine onto the surface of this sphere are what you see on your monitor(s). An image with a minimal FOV (median is around 80 degrees) occupies only a small section of the sphere's surface, so the bend in the image isn't severe. Bump up the FOV to 140+ degrees and the image basically looks like a half-circle, with the circular distortion of the image becoming very obvious at the sides.
I once found some good images on the net illustrating how this works, but my google-fu is failing me atm.