Say you bought a large monitor like I just bought - a Gateway 22" with a native res of 1680x1050. You might be worried about playing Oblivion at that high a native resolution when you normally play at 1280x1024. My x850XT PE can't handle it, a perfect example.
With a 1:1 monitor - you can set the video card resolution to 1280x1024 and the image will only use 1280x1024 in the center of the screen. That avoids goofy stretching/interpolation algorithms that blur your image. You can also do this from the graphics card, but ATi has had that feature broken for a long time and you'll have to trust the drivers going forward. Much better to have this done in the monitor!
The hard part if finding which monitors support the feature. For whatever reason, the manufactures never talk about it.
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