Once again. Software on the PC like powerstrip and advmame can't alter the distance between the lines on the monitor.
This isn't completely true either. Adjusting the frequency and adding line buffers (and all kinds of other stuff I don't even pretend to fully uderstand) can sometimes "fake it".
Resolution has a lot to do with the screen size it'll fill but not everything. Don't beleive me... look at old pc monitors...and I mean really old long before the built in adjustment circuitry. Set it to 640x480 and adjust the picture. Now set it to 320x240. Look at the results. When running at 320x240 it's not going to be prefectly aligned like it was at 640x480, but it'll usually be very presentable. By your logic it should only fill a quarter of the screen. See to have the same monitor display different resolutions, the timings (or ferquencey) is adjusted to essentially make one line as wide as two, or what have you. Resolutions that a multiples of each other usually look similar. Resolutions with extremely odd aspects and as a result odd frequencies are what cause the problems.
The goal with powerstrip and advancemame is to tweak the frequency end of things with all your resolutions so that they "like" each other. You also use them to block out resolutions that are too different. They can help somewhat. With that being said, advance mame and powerstrip still aren't the answer. As I said, they can only do so much.
And for the record imo the worst possible setup is to have a so-called "smart" monitor, also known as a monitor hybrid. A monitor hybrid is too crisp and has the wrong dot pitch. They have the limited resolution and high cost of a arcade monitor and the horrible, pixelated look of a pc monitor. All-in-all the worst of both worlds. If you are going to get a hybrid, you might as well get a pc monitor. They are essentially the same thing, only the pc monitor will be considerably cheaper and support higher resolutions, so you can play pc games on it.