I have the same problem. I am running 4:3 (1024x768) and I have a picture that I sized to 1024x768. I tell XBMC to use the picture I sized and it's stretched and cropped in XBMC.
When I play slideshows of my pictures in XBMC (the ones that I've sized to 1024x768), they all look perfect. But when I try using backgrounds that I've made to be the same size, they don't display properly.
*wonders if xbmc is displaying at a different res than 1024x768, even though that's what res my desktop is running*....
Ok, so I just ripped one of the images from the xpr file in mediastream. It's a 1280x720 image and it looks perfect on my screen with xbmc configured for 1024x768. So I took one of my images and resized it to 1280x720 and tried it in xbmc.... still doesn't display like it should (it's cropped/stretched). So now I've tried both 1280x720 and 1024x768 and neither is working right
Damnit! I just created a set of replacement images for the music portion of the textures.xpr file for mediastream (there are three images that make up the background image for each menu item). I created images that were the exact same size and color depth and named them the exact same names. I recompiled a new textures.xpr file with the updated music images. I fired up XBMC and looked at the background for Music on the home menu.... the background is black (null/empty)... nothing is displaying at all now.... How freaking hard can this be to make a damn image that fits the screen like the other images?....
Finally!! I found a way to make it work with my setup, and hopefully this will help others who are stuck trying to do the same thing. I took my original image (1024x768), copied it, created a new image 1280x768 and pasted the copy in the center of the new image and saved the image as a png file (I don't think it matters if you use jpg or png in this case, but I went with png at 32-bit this time). I opened xbmc and configured mediastream to use my two newly created images and they look so much better! They fit about as well as they're going to now.