1024x768 is 4:3 aspect ratio
1920x1080 is 16:9 aspect ratio
So a 1024x768 image would be stretched horizontally to fit a 1920x1080 screen, unless you add black bars to the sides of the image or use some other scaling strategy.
Check ***this solution***
to play Morrowind on a widescreen monitor without being horizontally stretched.
Widescreen is enabled via registry settings, but you can simplify this through the use of a 3rd party app - The FPS Optimizer for Morrowind.
Download the app here - http://planetelderscrolls.gamespy.com/View.php?view=Utilities.Detail&id=22
- and follow these steps:
1. Run the Morrowind FPS optimizer.
2. Click on the 'status' tab (if not already on it)
3. Click the 'change Morrowind registry settings here...' button at the bottom.
4. Change the value '1024' to '1280' and the value '768' to '800'.
6. Run 'Morrowind'.
That will run Morrowind in 1280x800, which is a widescreen resolution. You could also use 1280x768 if Morrowind allows it, which might be better for modern widescreen monitors which are wider than the older ones.