@ Graf: someone was puzzled about this addition because apparently "widescreen images have always worked" for them.
It turns out that said person was using a 1920x1080 TITLEPIC replacement, which doesn't squash the image to 4:3.
I downscaled the image to 356x200 and the picture gets squashed.
Was it meant to be like that? As in, if the image is high res, it doesn't get squashed?