Why does my monitor still report 640x200 but the screen is squished?
Sorry for being thick about this.
Your monitor isn't capable of displaying 1280x200 and tries to make the best of it. It gets squished horizontally because the horizontal resolution is doubled and thus the size (not the resolution, just the physical size on screen) of icons and stuff is reduced by 50%.
In reality, 1280x200/256 is hardly ever used.