Dosbox 0.72, windowresolution=640x480, fullresolution=1280x1024 (on an LCD monitor of that resolution), aspect=true, output=overlay, running on Linux.

Start Daggerfall, create a character, and get to the video clip of the emperor talking to you. The video clip seems stretched vertically (doesn't matter whether I'm doing this fullscreen or not).

With aspect=false, that particular video clip looks okay (though obviously other things won't get aspect-corrected).

What it looks like is that that particular video clip is supposed to be displayed in 320x240 with square pixels, but Dosbox is scaling it as if it was designed for 320x200 with non-square pixels.

Also, when you start Dosbox (unrelated to Daggerfall itself) and are running in fullscreen with aspect=true, it stretches the screen during a game but it doesn't stretch out the screen in DOS, so you end up with DOS in a 640x400 area in the middle of a 640x480 screen, with bars on the top and bottom.