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It's a common problem having a widescreen display that's stretched; there are some how-tos on the web (I just read one talking about Acer WLMi screens) that might help you out. You'll need to make sure the vertrefresh and horizsync values are correct, and try out which resolution works; not all 16:10 resolutions might work. I've also encountered a problem where a shared video memory, though "big enough", caused me to be unable to watch DVD-movies on the laptop (they were sluggish) when using a correct widescreen resolution, I could only play them when I switched to a non-widescreen resolution.
The Acer-laptop guide I saw yesterday (found from Google) had some good points in it, try to hunt it down. I don't remember the search terms (sorry) I used, but I'm pretty confident you'll find either it or some other how-to/guide/help page about this problem.
X just likes to not use widescreen resolutions, unless forced to.
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