I just tested this online, and it's definitely possible to play online with a custom widescreen resolution. But when hosting a game, there is an option to limit screen resolution, and if you try to join a game where the host has set a max resolution limit, then you will have to use that one. This option is not available if the host is using a custom resolution.
So in a nutshell, widescreen online can be done, but only if the host lets you.
No. I tried playing online multiple times with my friend using custom resolutions above 1024x768 - even if the host does not set a max resolution, it still doesn't work.
For some reason one of the players will automatically get set to 640x480 when the game starts even if resolutions are not restricted. For some reason, anything above 1024x768 does not work correctly in MP. I'm not sure why, and I haven't tested it with more than 2 players - but it's definitely a big anomaly.
I believe it's a big enough anomaly to have the grade re-reviewed.
P.S. What do you mean by: "slowdown during time warp" ?