It isn't a question of whether they can do the stretching or not, it is a matter of the quality of the image. Whenever you run an LCD at anything other than its native resolution, there will be scaling artifacts. This will be most noticeable on text, but will be visible on games as well (some pixelation and "jaggies").
Also, if you run full-screen, and the resolution of the game doesn't have the same aspect ratio as the monitor, the entire image will be distorted (compressed vertically or horizontally). E.g., a game that is set to 800x600 (4:3 aspect) will look rather strange if you stretch it to full-screen on a 1280x1024 (5:4 aspect) monitor.
If the world isn't making sense to you, you're either drinking too much or not drinking enough.