It's very simple. Your monitor's viewable area has a 4x3 aspect ratio. For pixels to be square, either the ratio between the number of horizontal pixels and vertical pixels must be equal to 4x3, or only a portion of the viewable are can be used (Think playing a widescreen movie on a regular TV). Otherwise, the pixels won't be exact squares, but rectangles. No going around it.
It's extremely noticeable in old mode 13h programs (Mode 13h is 320x200x256 colors), in which a function that draws a plain circle would generate an ellipse, and to draw what would appear as a circle, you had to draw an ellipse that took the strange aspect ration into account.
Monitors that support 1280x1024 generally support 1280x960, but drivers generally don't let windows use that resolution for the desktop.
Of course, the whole point is moot, considering the fact that D3D should not care one way or another (Even though the interface will look either ugly or slightly out-of-place, due to uneven scaling)