720x576 is a widescreen ratio, and little point sending higher than that because a CRT cannot deliver scanning resolution than that.
Actually, 720x576 is a PAL resolution. It is not widescreen as such.
(A 16:9 aspect ratio would be about 960x576 with TV shaped pixels but they ain't even square!)
If a widescreen picture is sent to the TV then it is sent with the anamorphic flag set so that the TV knows to stretch the picture to fit the full width of the screen.
Widescreen movies from my PC play back fine on my 28" CRT as they are anamorphic anyway but I have yet to find a solution for making the desktop have the right aspect ratio with the TV set to widescreen. I generally ignore it or set it back to 4:3 for web browsing. It appears much clearer that way because the TV is not trying to stretch the text across the screen.
I have not found a way of telling the PC to put out and anamorpic desktop yet. (on my 7800GT)
If you find suitable settings then let us know what they are
Edit: I tried 1024x576 but as I'm Dualview it seems to force the picture to scroll left and right with mouse movements
