Edit: I use launcher pro as well. My phone is a new Samsung Captivate running 2.1, un-rooted.
I find that many Android users who have been users for longer than a month tend to not understand this complaint.
I had the same issue. I'd take a picture of my fiancee, and when using it for a wallpaper I couldn't use the whole thing. And then it would stretch it to fit. I also use Launcher Pro, and only use one homescreen, so it's pointless for me to stretch.
After almost a week of investigating and searching, my solution was this:
I got the app "MultiPicture Live Wallpaper". It's designed to allow different pictures fitted to each homescreen. Pretty cool idea. I use it for the purpose of setting up a wallpaper on my only homescreen. Seems to do a fairly stand up job so far.