I figured out a "solution" to getting a nice 16:9 AR correct image on a widescreen monitor. This will still letterbox on a 16:10 display, but bar someone hacking the game open and changing how the game renders this will always be true.
The game (as stated earlier) assumes every resolution is 4:3 AR, so setting 1920x1200 just does a horrible horizontal stretch. The "solution" is to tell the game to play in a 4:3 resolution with the same horizontal resolution as your monitor. In this case, that's 1920x1440.
On my nVidia GeForce 6800GT using 162.18 ForceWare drivers, this would render the screen too low - 180 pixels down for the top black bar, 1080 pixels for the image is 1260. Fortunately, by moving my mouse downwards the screen will push up and show the full 1080p image. Positioning the image could also be possible with your display, but my monitor (BenQ G2400W) disabled those settings in the OSD because I was using DVI and not VGA.
The SettingsApplication.exe configuration app for BG&E pulls it's list of resolutions from the driver, so if you don't have the appropriate resolution you can add custom resolutions using your graphics card driver configuration.
Oh yes, and for GeForce 6 and beyond users the water transparency effect will cause huge slowdowns, you can either install an older driver which behaves (66.93) or set the water detail under SettingsApplication.exe's Advanced Settings tab to low which removes water transparency out in the world but the game runs smoothly again.
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