1366x768 is still the same aspect ratio of 720P, 16:9.
56% of all LCD TV's sold to date have this resolution, that includes 27 different manufactures.
Now, if 720P "is streched and looks like crap" then why do you think 27 manufactures create panels with this resolution?
To reduce production expenses. It is inferior when looking at LCDs to runnng it at its native resolution. That is far from the only factor involved, but it certainly has an impact.
Saw it at Fry's and loved it, but I don't know about HDTV's at all and was wondering if this was a decent TV?
Your eyes are the most important factor when looking at buying a TV for yourself. Much like monitors, it is actually quite foolish to buy one without checking it out for yourself prior to making your choice. If you really like that particular display by what your own eyes tell you, then you might want to ask around about any issues with reliability and such, but don't take the word of anyone else, myself included, about what you are going to like in terms of a good display. I listened to a lot of people last time I was looking to pick up a screen and heard a handful of displays reccomended continually by numerous people and was flat out shocked how bad they were. Use your eyes, if you really like the display you saw yourself and can afford the price, go with it.