Why would Halo2 stretch to fit the widescreen? It works fine on widescreen tvs.
Because it is only a 480p game I think, so 640x480 or something, trying to fill 1680x1050... Anyway, showing it on a higher res monitor probably exagerrated every jaggy, and other issues, as opposed to normal TVs.
Some 480p games are still 16:9 aspect ratio; there's no reason why it would look worse on an LCD monitor over a widescreen tv based on aspect. The only thing you'd have a problem with is if the monitor only displays at 1680x1050 (which is not a 16:9 aspect ratio... 1680x945 would be the equivalent, or 1867x1050).http://www.hdtvarcade.com/xboxlist.htm
Now, if you're using composite connection it doesn't send HD signal, or even the proper aspect. If you can configure the monitor to display 720p and send it a 480p signal, good for you. Problem with that is the xbox will only allow proper 480p using one of the component, not composite, hookups.
Now you guys have made me curious. Since the xbox doesn't have a DVI I doubt I could test this though. Man, I wish it DID have one. I'm pissed that the Xbox360 doesn't.