Ok guys.. I found a fix for the issue I was describing. I upgraded to the Windows 7 ultimate RTM (I'm a Microsoft Action Pack Subscriber) and I was having the same stretching of lower resolutions, making games that did not support Triplehead2go, impossible to play.
This was Windows 7 at 1280x1024 by default (screenshots won't properly show it because its maintains the pixels <_<)
To fix it, go to the Nvidia control panel and define a custom resolution, I'm assuming this will work with any resolutions that's causing issues, I have only tested it with 1280x1024
After defining the custom resolution, 1280x1024 now works like it used to
Hope this helps peeps~!