OK, here is a
representation of the distortion caused by the 5:4 aspect ratio.
This is my old motorcycle. It's gone now... sniff...
The rear wheel should be relatively round in the picture, and is so in the left image. On the right it seems a bit flattened - ie. squished so that it's wider than it is tall. Also, note that the bike looks longer sideways in the right picture.
The white space at the top of the right picture corresponds to the proportion of extra pixels you would get by using the 5:4 ratio over the 4:3 ratio. (Ie. Vertically, a 1280x1024 screen has 64 more pixels (6.7%) than a 1280x960 screen, but it also means that the vertical height of images will be distorted by the same amount. The width is the same.)
Note that the overall composite image is properly viewed on a 4:3 screen. If you're viewing this on a 1280x1024 screen, it's already going to be distorted.
Some of you may not think it's really a big deal, and in reality it isn't, especially for web browsing. However, for pictures it does make a noticeable difference as you can see.